RE: Oncologica20 Mar 2021 02:58
@Alwayslate7
I see it as very much good news.
What we know for sure is that the war chest must be north of £130m at this point. Brokers without doubt would be advising them to look for targets that will add revenues after Covid and targets that could deliver ROI minimum 15-20% pa. This is what I would be saying for sure.
They are not confirming strategic policy until H2, but I suspect this is down to how successful M&A is in the meantime. We discussed this in some detail on LSE and the consensus was that several smaller deals where they can add value are more likely.
IMO, they do not need to reinvent the wheel they just need to do things better than their peers to take significant market share. They have world class DETECTION, testing solutions, reagents etc and they are increasing other SERVICES to support labs, rolling out mobile labs etc, NPT and NHS support.
They are also in other verticals as we know Tumour detection and maternity tests, health and Food and Drink. So, you have the main Diagnostics Capability fields and then you have expansion within specific industry sectors in those fields.
A peer comparison like Perkin Elmer, which is a good example, illustrates what I mean, see here: -
https://www.perkinelmer.com/uk/corporate/what-we-do/capabilities/
So, if you were GM in this position what would you do? Well, this is pure conjecture because we do not know for sure what he is thinking but if I were to take an educated guess I would say, if you supply labs with world class testing and volume products you may as well own a few and deliver the services as well. Then we come onto INFORMATICS and IMAGING where they have little exposure and we identified one or two targets there also.
There are many areas to expand but in order of the sort of next likely moves, that are manageable, I would say in order of priority but its pure guesswork: -
https://www.cignpostdiagnostics.com/ - Or similar. We think Novacyt have something like 10 mobile labs and increasing so why not expand this number and go the whole hog and include mobile lab design services. Its within 6 miles of Novacyt H/O so right on doorstep.
https://www.oncologica.com/about-us/ - Or similar. Not just modern lab design in Novacyts region but significant opportunity post covid in cancer screening
https://www.biograd.co.uk/ -Or similar which we keep coming back to on LSE numerous times due to clear connections. Again, a lab network.
At the end of the day, I could be writing utter nonsense, its only an opinion but I am probably not far the mark based on what we are seeing as moves made in this sector.
We are still at the start of the journey. Everything very much in Play and the future outlook mega exciting.....
Pork’s
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