Here's how Biosensors will milk benefits from Spectrum Dynamics acquisition

Post-acquisition balance sheet is at US$500m.

According to CIMB, Biosensors Int'l has entered into an agreement to acquire all assets of Spectrum Dynamics, a leader in advanced functional assessment technologies, including those used to evaluate patients for cardiac interventions, subject to the fulfilment of certain conditions. 

CIMB noted that the deal consideration is c.US$51m, with potential earn-out payments upon fulfilling certain performance criteria. Under the terms of the deal, the two companies will also create a JV aimed at developing future non-cardiac applications.

Here's more:

The transaction will be funded by internal resources and the acquisition is not expected to have a material impact on BIG’s EPS or NTA for the current FY14. There could be moderate accretion to BIG’s earnings going into FY15.

The acquisition fits BIG’s strategic intent to expand its product line offerings and develop new revenue streams. Management has always said it is committed to continue broadening its scope of business to take the group to the next level.

The post-acquisition balance sheet has c.US$500m in cash. We believe this could be the first among a series of acquisitions to come. We maintain Outperform pending more information from the group.

Our FY15 estimate reflects the initial uplift from the commercialisation of the new launch of BioFreedom. Adding Spectrum Dynamics will further boost earnings.