RE:RE:RE:RE:RE:Normalized Earnings Analysis of CRH Medical
"D. I think this is the most important point and the main line of defense in the draconian scenario. If Cologuard were to really damage the GI anesthesia market, then CRHM could move into other anesthesia practices. This fact sheet from the American Association of Nurse Anesthetists suggests that there are at least 32M surgical procedures that require anesthesia in the US every y year: https://www.aana.com/forpatients/Pages/Anesthetic-Awareness-Fact-Sheet.aspx. If you assume that all 15M colonoscopies are included in this number, that still leaves 17M procedures for CRHM to monetize. And every anesthesiologist I've spoken with says that it is fairly straightforward to switch sub-specialties within anesthesia (e.g., GI to cardiac) and that many anesthesiologists already practice across multiple sub-specialties. "
If CRH gets into other areas of anesthesiology services outside of colonoscopies, logic would suggest they will then have numerous other competitors who are already providing those services, some of which I imagine are quite large and entrenched....Now, perhaps CRH will then attempt to "consolidate" by acquiring these businesses as well, but given their limits re. cash on hand plus credit line, this will likely be an even slower and more complex process to try and dominate the market in these areas as well.......Perhaps they will eventually succeed, but that would likely take an even longer time to come to fruition with no guarantee that the share price will rocket ahead at some point in the future.......
One other question for those with a detailed understanding of CRH acquisitions:
If the idea is to buy slightly more than 50% interest in many of these companies, then, when the now minority owners retire / get out, they will sell the remainder of the business to CRH, how will that final purchase price be determined....?.....As has been mentioned, factors such as government legislation, new technologies, etc. can impact the value of CRH and its parts, so would there not be a distinct possibility that when the original owners are ready to leave, a sale price for the remaining interest will have to be negotiated, perhaps with a resulting impasse / dispute as to what the fair market value of that remaining interest is....?