Latest / What the Flux / Wisetech's next $3.3 billion bet | Healthscope goes bust | Tim Tam slams on the expansion

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Wisetech's next $3.3 billion bet | Healthscope goes bust | Tim Tam slams on the expansion · What the Flux

• 0:05
  Speaker 1: This is off the Flux. I'm Brett and our justin a.
• 0:08
  Speaker 1: It's Wednesday, the twenty eighth of Bay Jazzy Boy. There
• 0:10
  Speaker 1: is a race for ossies to get into the property market.
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  Speaker 1: Pre approvals through mortgage brokers increase twenty four percent in
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  Speaker 1: March after the first cash rate cut this year according
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  Speaker 1: to Equifax, and with another rate cut recently, you can
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  Speaker 1: only imagine even more Ozzie's trying to get in. What's
• 0:25
  Speaker 1: of fomo going on? By Man Speaking of Fomo.
• 0:27
  Speaker 2: Flux fan, we have done a deep dive into the
• 0:29
  Speaker 2: property market in Australia how rate cuts and the government's
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  Speaker 2: five percent deposit could impact the property prices over the
• 0:35
  Speaker 2: next twelve months, and it begins firing up. So if
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  Speaker 2: you want to learn more about what the experts think
• 0:40
  Speaker 2: will happen to the property market in twenty twenty five,
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  Speaker 2: make sure to download the Flux out and check out
• 0:44
  Speaker 2: our latest articles Three Monstrous stories Today Juzzy boy, let's
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  Speaker 2: do it for our first Wise Tech, the ASX listed
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  Speaker 2: logistics Beast, has announced a two point one billion US
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  Speaker 2: dollar acquisition, its biggest yet by a mile.
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  Speaker 1: Wise Tech making acquisitions left right and center. B Man
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  Speaker 1: so tell me what's going on here? All right? So,
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  Speaker 1: wise Tech Global is the asxisted logistics software company which
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  Speaker 1: was founded in nineteen ninety four, and.
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  Speaker 2: It does those unseexy logistics activities like helping with supply
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  Speaker 2: chain management or customs clearance or forwarding services, real riveting stuff,
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  Speaker 2: but been man Over the last twelve months, it has
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  Speaker 2: been a real rocket time for wis Tech.
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  Speaker 1: Yeah, it's founder, Richard White was accused of bullying as
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  Speaker 1: well as inappropriate conduct at work. But now wise tech
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  Speaker 1: has made its biggest acquisition of all time. Yeah, it's
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  Speaker 1: acquired a US PUBLICULASTD supply chain management company named E
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  Speaker 1: two Open and E two Open.
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  Speaker 2: It's also had a testy couple of years. Its market
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  Speaker 2: cap actually fell lower than its total debt.
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  Speaker 1: But that hasn't stopped wis Tech swooping in with a
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  Speaker 1: two point one billion US dollar acquisition. So it's a
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  Speaker 1: big step up in wis Tech's aggressive acquisition strategy, especially
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  Speaker 1: with so much going on internally at wis Tech right now.
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  Speaker 1: So what is the key learning here? Well, small deals
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  Speaker 1: can glide under the radar. Big ones demand a spotlight.
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  Speaker 1: Over the past decade, wise Tech has acquired more than
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  Speaker 1: fifty five companies, and the man wey Sex mainly funded
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  Speaker 1: these acquisitions through its profits as well as some smaller
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  Speaker 1: investments YEAP. In the past, the acquisitions have been mostly
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  Speaker 1: small to medium businesses across freight and rail and supply
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  Speaker 1: chaineech and so far, so good on the acquisition train, supposedly.
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  Speaker 2: Yeah, but but man, this deal is a totally different
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  Speaker 2: style of acquisition.
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  Speaker 1: Well, firstly, it's the biggest acquisition wise tech's ever done.
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  Speaker 1: We're talking three times bigger than any deal before it.
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  Speaker 1: And secondly, they're taken on three billion US dollars in
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  Speaker 1: new debt just to fund the deal, and that means
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  Speaker 1: a big shift in risk profile because they are not
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  Speaker 1: only paying for the acquisition but also interest repayments on debt. So, Man,
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  Speaker 1: when companies go all in the stakes get a whole
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  Speaker 1: lot higher. And with the spotlight on Wistech for other
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  Speaker 1: reasons at the moment, it will need to prove that
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  Speaker 1: this acquisition was absolutely worth it. Yeah.
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  Speaker 2: For our second story, health Scope, Australia's second largest private
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  Speaker 2: hospital group, has fallen into administration after its struggled to
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  Speaker 2: repay its whopping debts.
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  Speaker 1: Horrible time for healthco Jazzy boy, what is going on here?
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  Speaker 2: Bit abautground b Man. Healthscope is one of Australia's biggest
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  Speaker 2: private hospital operators. We're talking over thirty nine hospitals across Australia.
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  Speaker 1: And over nineteen thousand star And.
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  Speaker 2: While Healthscope was previously listed on the ASX, it was
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  Speaker 2: acquired by private equity giant Brookfield in twenty nineteen.
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  Speaker 1: For or lazy four point one billion dollars. But now
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  Speaker 1: be Man health Scope has gone into receivership after its
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  Speaker 1: struggle to repay its debt and keep its finance as
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  Speaker 1: a fault now, Dazi boy. It blamed three key issues.
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  Speaker 1: What was the first one? It was carrying too much debt.
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  Speaker 1: We're talking at one point four billion bucks in debt.
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  Speaker 1: It was paying huge rents on the hospital premises.
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  Speaker 2: And it claims that the amount of private health insurance
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  Speaker 2: pay to private hospital is just too low.
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  Speaker 1: Yeap. Next minute, health Scope appointed receivers to sell off
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  Speaker 1: the hospitals and Jazi boy, the Federal government has said
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  Speaker 1: that a bailout is not going to happen under any conditions, particularly.
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  Speaker 2: Because health Scope is a private hospital owned by a
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  Speaker 2: private equity giant.
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  Speaker 1: But with thousands of patients in the hospitals right now.
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  Speaker 1: They've also got to stay open. So what is the
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  Speaker 1: key learning here? When private equity enters sectors like healthcare
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  Speaker 1: or education or aged care, things can get a bit messy.
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  Speaker 2: Yeah, because, b man, we know that the goal of
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  Speaker 2: private equity is about maximizing financial returns.
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  Speaker 1: Yeap companies like Brookfield By companies often with a lot
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  Speaker 1: of debt, and then try to make them more profitable.
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  Speaker 2: Which would be through cost cutting or price rises or restructuring, and.
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  Speaker 1: Then they aim to sell the companies for a gain.
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  Speaker 2: But when you apply that profit focused model to healthcare,
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  Speaker 2: things can start to unravel.
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  Speaker 1: Because healthcare should be focused primarily on better patient outcomes.
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  Speaker 1: But be maned.
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  Speaker 2: With up to ten companies already sending offers to the
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  Speaker 2: receivers for health Scope, here's hoping the hospitals can continue
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  Speaker 2: a smooth operation with its new owners.
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  Speaker 1: For our third and final story, Arnots is writing a
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  Speaker 1: new wave of love for its timtams with its plans
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  Speaker 1: to expand aggressively overseas.
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  Speaker 2: I know you'd be saying, God bless those gluten free
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  Speaker 2: tymtams right now, be man totally me more.
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  Speaker 1: Well, Arnots is the one hundred and sixty year old
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  Speaker 1: Aussie food icon and the local market leader when it
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  Speaker 1: comes to biscuits.
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  Speaker 2: Yep, it's the maker of all your childhood and adulthood
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  Speaker 2: favorites like your shapes, your tiny teddies, your Scotch fingers.
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  Speaker 1: Heaven bless those pizza shapes. May I add, but b Man,
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  Speaker 1: Tim Tams are really having a moment right now. I
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  Speaker 1: was thinking that they are always having a moment. To
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  Speaker 1: be honest, juzzy boy, that's true. But get this, be Man.
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  Speaker 1: Tim Tams now make up forty one percent of the
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  Speaker 1: chocolate biscuit market in Australia. Wow, It's market share grow
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  Speaker 1: by five point eight percent in the past year alone.
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  Speaker 2: And now Art has announced plans for international domination with
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  Speaker 2: its trusty tim Tams.
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  Speaker 1: Yeah, it's planning to grow it's Timtam business in the UK,
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  Speaker 1: the US, Canada and even Japan and b Man.
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  Speaker 2: It's also been pushing brand extensions with other brands in
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  Speaker 2: the Art stable like Jats, Tim Tams.
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  Speaker 1: And brand extensions with its gluten free Range two which
• 5:42
  Speaker 1: is killing it and I one hundred percent endorse. So
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  Speaker 1: what is the key learning here? Product line extensions are
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  Speaker 1: when a company introduces new products within an existing brand.
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  Speaker 2: The goal is to teach new customers about existing products
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  Speaker 2: and cater to their shifting preferences.
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  Speaker 1: The benefit of product line extensions is they reduce the
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  Speaker 1: risk typically associated with new product launchers. Instead of starting
• 6:03
  Speaker 1: from scratch, brands piggyback off other familiar names like Timtams
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  Speaker 1: or shapes and they just adjust the flavor or the format.
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  Speaker 1: Take the Artt's gluten free range, be man It leveraged
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  Speaker 1: the existing products in the Artet's range and change the
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  Speaker 1: ingredients to make them more appealing to an underappreciated demographic.
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  Speaker 1: In fact, Arnest's gluten Free Range is driving about eighty
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  Speaker 1: percent of the growth in the gluten free biscuit market.
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  Speaker 1: And what a market it is. So now, me man Or,
• 6:29
  Speaker 1: We're busy perfecting the Tim tamslamb Ardits is quietly taking
• 6:32
  Speaker 1: over the world and I'm here for it. Whatsam prayer
• 6:35
  Speaker 1: proval is going through the room, cash rate going down,
• 6:37
  Speaker 1: clearance rates going up. It's all happening in the property
• 6:40
  Speaker 1: market in Australia right now. We cover it all in
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  Speaker 1: the Flux app with a deep dive into expert analysis
• 6:45
  Speaker 1: and predictions of what's going to happen to the housing
• 6:47
  Speaker 1: market in twenty twenty five, So if you want to
• 6:49
  Speaker 1: learn more, make sure to download the Flux app and
• 6:51
  Speaker 1: check it out. Thanks for listening, and we'll see you
• 6:53
  Speaker 1: on Friday.