TS03 Inc Trust Units TSTIF

COO acq. of Paragard suggests TOS will be up 40% 18' YE

[WickedTuna1]

Yesterday, COO (The Cooper Companies) announced acquisition of med device company Paragard (IUD product) for $1.1B which is 6.5X TTM sales for a product w/ 16% mkt share in a mkt size of ~$1B/year revs. Lets consider what this means for med tech cos like TOS which have a stronger product differentiation vs. peers (JNJ & STE) and operate in a larger mkt of $4.5B in equip sales (10% oppty per year$450MM) and estimates of $1B/year in consumables alone! Point is: Med-device fetches healthy multiple on take-outs. And TOS is estimated to do 40M in sales total in 2018 (conservatively estimated by assuming we see ~240 units sold (by end of 2018) and ONLY assuming consumables revs on the installed base sold in 2016 +2017). So, 6.5X multiple on 40MM in 2018 = $260M/C/$exchange of 0.8239 = C$ mkt cap of 316M+15Mcash = 330C$/92MM shares = C$3.60 or 40% upside very conservatively. I say conservative analysis bc this comparable analysis doesnt assume any of the following: a takeout should have a much higher multiple given the re-curring (royalty like) revenue nature of the biz or upside from additional claims, or upside from fda mandating sterilization for any types of scopes, or any consumables sales revenues from units sold globally in 2018 etc. which is pretty bearish given the renewed efforts of Getinge training program. So this is my bear case.. while my bull case the #s are a lot bigger!! All you have to believe is that Getinge is finally motivated and in a position to accelerate installations to units already sold! and based on last weeks PR from TOS (Getinge clearly is as they just invested on their dime to train all all sales people globally for 4 weeks on the VP4) which de-risks any of the concerns out there so to me .pieces are falling into place to see sales pickup fast. Hang in there.