Integral Diagnostics extends gains after ACCC clears merger
Make us a preferred source
Make us a preferred source on Google
The news: Shares in Integral Diagnostics climbed on Tuesday, extending gains from the previous session after the Australian Competition and Consumer Commission (ACCC) said it will not oppose the company's proposed merger with Capitol Health.
The numbers: Integral Diagnostics shares were up 1.9% to $2.99 by 2:25pm AEDT, having closed 1% higher on Tuesday. Capitol Health was flat at 38 cents.
Jarden retained its 'buy' rating on the stock but lowered its target price from $3.72 to $3.68.
The context: Jarden analysts noted that Integral Diagnostics' divestiture of one clinic in Melton, Victoria — as a condition of the ACCC's approval — is "immaterial" to the merged group, having formed 0.4% of EBITDA in FY24.
They said the deal is compelling, with numerous value accretive opportunities from the pending merger. These include "significant" additional scale, a wider referral base, the introduction of telehealth opportunities, and the implementation of Integral Diagnostics' enhanced billing accuracy system across Capitol Health's clinics.
These opportunities should add to the $10 million in cost saving initiatives already identified by the company's management, the analysts noted.
Elsewhere, Jarden flagged other "big opportunities emerging", including deregulation around magnetic resonance imaging (MRI). Jarden expects that the upgrade of 17 partial MRI licences to fully funded machines from 1 July 2025 will generate a $14.8 million revenue opportunities with minimal capital expenditure investment.
The source: Jarden research
