Wake-up call
The once drowsy sleep treatment sector is now on full alert as two foreign companies emerge with stakes in the ASX-listed Compumedics.
In the market most attention is on the gymnastics being undertaken by major companies. But down amongst the smaller companies there are strategic manoeuvrings that often go unnoticed.
Yesterday the European group Medigas Italia, which is part of the SIAD group of companies, announced that it had purchased 2.7 per cent of the tiny Australian company Compumedics. Given that the chairman and CEO of Compumedics David Burton owns 60 per cent of the company it seemed a strange move, but with a market cap of around $25 million it represented a small outlay.
But Medigas is a major distributor of Compumedics sleep diagnostic equipment and it is also a distributor of Respironics sleep treatment systems, a rival to the system produced by the Australian based Resmed. Seeing the potential of the company, the Dutch electronics giant Philips bought Respironics for €35 million in March this year. Compumedics is now planning to enter the sleep treatment market with a new product itself. Medigas says that there are no rival products for the Compumedics sleep treatment systems so it can continue to distribute both systems.
While its true the Compumedics and Respironics systems are different there is no doubt that some people will need to make a choice. The sleep treatment systems of Compumedics still have to be approved by European authorities but clearly Medigas believe this is a formality.
Another major distributor of Compumedics sleep diagnostic systems the giant Japanese company Teijin which owns five per cent of Compumedics. Teijin is a major distributor of Resmed sleep treatment systems and the Japanese giant will need to consider whether it adds the Compumedics sleep treatment systems to its range.
Compumedics believes that it can capture a portion of the sleep treatment market because its new system is very compatible with its sleep diagnostic equipment which has a significant share of the global diagnostic market.
Compumedics is a tiny company that has been operating in the sleep diagnostic market for a long time. Its journey has been punctuated by mistakes and it has periodically incurred losses. But it has now reached the point where at least one major is sitting up and taking notice.
If Compumedics wants to make serious push into the sleep treatment business it will need to raise moire capital – never easy when the is a big family shareholder and the share price is low. Its two major international shareholders will be vital in any capital raising and if they participate they will want to end up with more significant stakes.
The sleep treatment business is about become more exciting and will keep Resmed wide awake.
Yesterday the European group Medigas Italia, which is part of the SIAD group of companies, announced that it had purchased 2.7 per cent of the tiny Australian company Compumedics. Given that the chairman and CEO of Compumedics David Burton owns 60 per cent of the company it seemed a strange move, but with a market cap of around $25 million it represented a small outlay.
But Medigas is a major distributor of Compumedics sleep diagnostic equipment and it is also a distributor of Respironics sleep treatment systems, a rival to the system produced by the Australian based Resmed. Seeing the potential of the company, the Dutch electronics giant Philips bought Respironics for €35 million in March this year. Compumedics is now planning to enter the sleep treatment market with a new product itself. Medigas says that there are no rival products for the Compumedics sleep treatment systems so it can continue to distribute both systems.
While its true the Compumedics and Respironics systems are different there is no doubt that some people will need to make a choice. The sleep treatment systems of Compumedics still have to be approved by European authorities but clearly Medigas believe this is a formality.
Another major distributor of Compumedics sleep diagnostic systems the giant Japanese company Teijin which owns five per cent of Compumedics. Teijin is a major distributor of Resmed sleep treatment systems and the Japanese giant will need to consider whether it adds the Compumedics sleep treatment systems to its range.
Compumedics believes that it can capture a portion of the sleep treatment market because its new system is very compatible with its sleep diagnostic equipment which has a significant share of the global diagnostic market.
Compumedics is a tiny company that has been operating in the sleep diagnostic market for a long time. Its journey has been punctuated by mistakes and it has periodically incurred losses. But it has now reached the point where at least one major is sitting up and taking notice.
If Compumedics wants to make serious push into the sleep treatment business it will need to raise moire capital – never easy when the is a big family shareholder and the share price is low. Its two major international shareholders will be vital in any capital raising and if they participate they will want to end up with more significant stakes.
The sleep treatment business is about become more exciting and will keep Resmed wide awake.
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