Vet Diagnostic Vertical valuation Idexx and Antech, a subsidiary of Mars control about 90% of the $2.6B pet diagnostic industry. Both companies try to hold on to their Vet clinics via long term contracts and incentives directly at creating forced user loyalty and a barrier to competitive entry. LXXGF's decentralized/faster approach to pet lab testing represents a new significant disruptive competitive variable to the two Big Boys' current centralized and infrastructure-heavy business model. In addition, there is a third smaller player. Zoetis is a $6.5B company which owns Ethos Veterinary Health (remember them....the Miglab test site in Boston). Zoetis could be an excellent partner for LXXGF because both could benefit from a strategic relationship.
They believe that: "The veterinary diagnostics category, which includes reference laboratory and point-of-care diagnostics, is estimated to be more than $3 billion, with compound annual growth of 10% over the past three years. Zoetis expects the diagnostics category to continue to grow faster than the animal health industry, with growth in the mid to high single digits, driven by international adoption of point-of-care diagnostic instruments due to rising medicalization rates, increasing standard of veterinary care and the convenience of in-clinic testing.(My bold)“
I found that in 2018 Zoetis bought Abaxis for $2 Billion in cash. Abaxis is in the diagnostic and consumable discs,kits and cartridges space. About 78% of its $245 million sales are in “consumables”.This acquisition provides a valuation comparable for LXXGF's Vet Diagnostic vertical. Specifically, if you divide the $2 Billion by LXXGF's 114 million shares the resulting valuation for the Vet Diagnostic vertical equals to an estimated SP of $17.50.