Integral Diagnostics (IDX) M&A Announcement summary

Deal rationale and strategic fit

• Merger will create a leading diagnostic imaging provider in Australia and New Zealand, combining complementary geographic footprints and clinical capabilities.

• The combined entity will operate 155 clinics, employ over 350 radiologists, and have approximately 3,000 staff.

• Strategic benefits include deeper clinical expertise, advanced technology adoption, and a robust clinical governance framework.

• Enhanced scale will support further organic and inorganic growth, including M&A, investment in high-end imaging modalities, and AI-enabled technology.

• The merger is seen as a natural fit due to complementary presence and potential for significant synergies.

Financial terms and conditions

• Capitol shareholders will receive 0.12849 Integral shares per Capitol share, implying an offer price of AUD 0.3264 per Capitol share.

• The offer values Capitol at an enterprise value of AUD 413 million and equity value of AUD 350.6 million.

• Integral shareholders will own approximately 63% and Capitol shareholders 37% of the combined group.

• Pro forma FY23 revenue is over AUD 650 million, with pro forma EBITDA exceeding AUD 90 million.

• Premiums of 33% to last close, 28% to 1-month VWAP, 27% to 3-month VWAP, and 14% to 6-month VWAP for Capitol shares.

Synergies and expected cost savings

• At least AUD 10 million in annual pre-tax net cost synergies identified, expected to be achieved by the end of year 2 post-completion.

• Majority of synergies expected in the first year, with full realization within two years.

• Synergies mainly from headcount reduction, elimination of duplicate listed company costs, and indirect procurement savings.

• Additional administrative and revenue synergies anticipated, including productivity improvements and cross-referral opportunities.

• Synergies to drive double-digit pro forma EPS accretion for Integral shareholders in FY25.