GREY:TSTIF - Post by User
Comment by
Drrwongon Jan 30, 2018 4:12pm
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Post# 27465750
RE:RE:RE:Why would they get out?
RE:RE:RE:Why would they get out?@MustangSalley: Obviously the exact numbers are only known to Getinge management, so we are all guess-estimating here. While I agree with Scotia's estimates of $100-105k acquisition cost for Getinge, my selling price is not $160k. We know competing systems' ASP was around $150k and they have been discounting them by 15% (or so) to attract buyers (go back to TSO3 conference call transcripts in the past). My sources say Getinge has been matching that discount in their sales, hence I am using $135k as Getinge's ASP. Now subtract a sales commission ($10-15k), plus installation costs, plus working capital/warehousing/transportation/insurance costs, there is not much profits left for Getinge. We can argue what these exact numbers are, but the bottomline is Getinge will make a lot less profits selling VP4s than their own products, which is typical for another company with an inlicensed product vs. a wholly owned product. So if Getinge USA is trying to hit certain profit targets, they will likely direct their sales people's energy to sell Getinge produced products, and that is the crux of my argument--"agency conflict".