u/Dull_Ant1291

Market cap at 36.5c: ~$265m

Healius is selling Agilex Biolabs through a UBS-run process with multiple PE bidders already in the data room. Expected proceeds: $150-200m. Zero tax on the sale — they paid $301m for it in 2021 so the capital loss shelters the entire gain.

The free pathology calc:

$265m market cap minus $150m Agilex proceeds = $115m net cost for the core pathology business.

That business does $1.3bn revenue and $260m EBITDA annually. You’re paying 0.44x EBITDA for Australia’s second largest pathology network with 2,000+ collection centres and irreplaceable Medicare provider numbers. Comparable ACL trades at 5.6x EBITDA with identical sector headwinds.

The solvency scaremongering is wrong

The $800m “debt” bears cite is AASB 16 lease accounting — not financial debt banks can call. Actual net position: $11.6m net cash, $40m drawn on a $300m facility that doesn’t mature until 2028. Covenant breach requires drawing an additional $120m+ with no reason to do so. Not happening.

Why so cheap?

Management destroyed value 2021-2024 — the $301m Agilex overpay, repeated guidance misses, the ACCC blocking the ACL merger that would have delivered $2.05/share. Scar tissue is real. Medicare freeze and Fair Work wages hitting simultaneously killed near-term margins. Tax loss selling before June 30 is amplifying the move.

All real. All priced in and then some.

Catalyst: August results. Agilex sale confirmed. Market realises pathology came free. UBS just sold Healius’s Lumus division for 25.4x EBIT when sentiment was equally horrible. Same bank, same management, same playbook.

68m shares short at 12.4 days to cover. Any positive catalyst in a $265m market cap stock gets violent.

Bear case still gives you 51c. Base case $1.25. Not financial advice. Holding.