Beacon securities maintains $0.65 target price Patient Home Monitoring
(PHM – V)
Closes Acquisition of Case
Medical
June 10, 2014
Doug Cooper, MBA
(416) 643-3863
dcooper@beaconsecurities.ca
Margaux Berry, MSF, Associate
(416) 364-5148
mberry@beaconsecurities.ca
PHM announced that it has closed its acquisition of Case
Medical, a Georgia-based supplier of pulmonary
equipment.
Company paid a total of $5.4 million including $1.6 million
of shares (5.65 million @ $0.28), $0.2 million of cash and the
assumption of ~$3.4 million of equipment leases.
Based on a TTM revenue run-rate of $13 million and $2
million of EBITDA, PHM paid 2.7x TTM EBITDA.
We expect the transaction to contribute approximately 3
months in FY14 and to be accretive to our previous
forecast.
We have raised our full-year FY15 and FY16 revenue and
EBITDA forecast accordingly to $34.3 million/$6.6 million
and $42.7 million/$8.6 million.
PHM still has $7+ million in cash and a healthy pipeline of
acquisition targets.
While we have not incorporated any further acquisitions in
our financial forecasts, we base our $0.65 target price
(unchanged) on an EBITDA run-rate of $8 million by FY14
year-end. At a current EBITDA pace of ~$6 million, such a
target would imply utilizing the $7 million in cash for further
acquisitions.
We maintain our BUY rating and a 12-month target price of
$0.65
ciao vito