Fisher & Paykel Healthcare Corp Ltd

FPH Details
· Favorable Court Proceedings: Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) reported that Munich District Court overturned both preliminary injunctions of patent dispute against Fisher & Paykel Healthcare’s German subsidiary, Fisher & Paykel Healthcare GmbH, which were earlier granted to ResMed. This was regarding selling the group’s Eson and Eson 2 masks in Germany. As a result, FPH stock surged over 3.56% on December 02, 2016. Management remains positive on the future proceedings.

· Recommendation: The shares of FPH have been on a downtrend since the last six months and fell over 21.5% (as of December 01, 2016). Still the stock is trading at an unreasonable level. We maintain our “Expensive” recommendation at the current price of – $ 8.15

Virtus Health Ltd

VRT Details
· Acquired Aagaard Fertility Clinic: Virtus Health Ltd (ASX: VRT) stock generated over 1.7% returns on December 02, 2016. The group’s Aagaard Fertility Clinic acquisition which is based in Aarhus Denmark contributed to this momentum. VRT is acquiring the clinic for DKK85 million or AUD 16.5 million on a cash free/debt free basis. This includes payment of DKK56 million (AUD 10.8M) upon completion of the transaction, plus an adjustment payment in the 12 month period ending 31 December 2016 and earn out in 12 month period ending 31 December 2017 based on EBITDA. This move is a part of VRT’s efforts of geographical expansion and diversification. Aagaard delivered 1,751 IUI cycles and 345 IVF cycles in 2015 and their growth momentum continued even during this year to date till September 2016. This clinic is strategically positioned near to the Aarhus University hospital, which is the second major public hospital in Scandinavia. Management intends to leverage Scandinavia opportunities having operational as well as regulatory similarities with Australia, including a good legislative framework for Assisted Reproductive Services. The group is expecting the acquisition to be EPS accretive on a full year 2017 basis.

· Recommendation: We give a “Hold” recommendation at the current price of – $ 6.01

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