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

Wisetech, the ASX-listed logistics beast, has announced a $2.1 billion acquisitions — its biggest yet… but a long mile.

Healthscope, Australia’s second-largest private hospital group has fallen into administration after it struggled to make repayments on its whopping debt.

Arnotts is riding a new wave of love for its Tim Tams with its plans to expand aggressively overseas.

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Episode Transcript

Speaker 1 (00:05):
This is off the Flux. I'm Brett and our justin a.
It's Wednesday, the twenty eighth of Bay Jazzy Boy. There
is a race for ossies to get into the property market.
Pre approvals through mortgage brokers increase twenty four percent in
March after the first cash rate cut this year according
to Equifax, and with another rate cut recently, you can
only imagine even more Ozzie's trying to get in. What's

(00:25):
of fomo going on? By Man Speaking of Fomo.

Speaker 2 (00:27):
Flux fan, we have done a deep dive into the
property market in Australia how rate cuts and the government's
five percent deposit could impact the property prices over the
next twelve months, and it begins firing up. So if
you want to learn more about what the experts think
will happen to the property market in twenty twenty five,
make sure to download the Flux out and check out
our latest articles Three Monstrous stories Today Juzzy boy, let's

(00:48):
do it for our first Wise Tech, the ASX listed
logistics Beast, has announced a two point one billion US
dollar acquisition, its biggest yet by a mile.

Speaker 1 (00:58):
Wise Tech making acquisitions left right and center. B Man
so tell me what's going on here? All right? So,
wise Tech Global is the asxisted logistics software company which
was founded in nineteen ninety four, and.

Speaker 2 (01:08):
It does those unseexy logistics activities like helping with supply
chain management or customs clearance or forwarding services, real riveting stuff,
but been man Over the last twelve months, it has
been a real rocket time for wis Tech.

Speaker 1 (01:21):
Yeah, it's founder, Richard White was accused of bullying as
well as inappropriate conduct at work. But now wise tech
has made its biggest acquisition of all time. Yeah, it's
acquired a US PUBLICULASTD supply chain management company named E
two Open and E two Open.

Speaker 2 (01:35):
It's also had a testy couple of years. Its market
cap actually fell lower than its total debt.

Speaker 1 (01:40):
But that hasn't stopped wis Tech swooping in with a
two point one billion US dollar acquisition. So it's a
big step up in wis Tech's aggressive acquisition strategy, especially
with so much going on internally at wis Tech right now.
So what is the key learning here? Well, small deals
can glide under the radar. Big ones demand a spotlight.
Over the past decade, wise Tech has acquired more than
fifty five companies, and the man wey Sex mainly funded

(02:03):
these acquisitions through its profits as well as some smaller
investments YEAP. In the past, the acquisitions have been mostly
small to medium businesses across freight and rail and supply
chaineech and so far, so good on the acquisition train, supposedly.

Speaker 2 (02:16):
Yeah, but but man, this deal is a totally different
style of acquisition.

Speaker 1 (02:20):
Well, firstly, it's the biggest acquisition wise tech's ever done.
We're talking three times bigger than any deal before it.
And secondly, they're taken on three billion US dollars in
new debt just to fund the deal, and that means
a big shift in risk profile because they are not
only paying for the acquisition but also interest repayments on debt. So, Man,
when companies go all in the stakes get a whole

(02:41):
lot higher. And with the spotlight on Wistech for other
reasons at the moment, it will need to prove that
this acquisition was absolutely worth it. Yeah.

Speaker 2 (02:49):
For our second story, health Scope, Australia's second largest private
hospital group, has fallen into administration after its struggled to
repay its whopping debts.

Speaker 1 (02:58):
Horrible time for healthco Jazzy boy, what is going on here?

Speaker 2 (03:01):
Bit abautground b Man. Healthscope is one of Australia's biggest
private hospital operators. We're talking over thirty nine hospitals across Australia.

Speaker 1 (03:08):
And over nineteen thousand star And.

Speaker 2 (03:10):
While Healthscope was previously listed on the ASX, it was
acquired by private equity giant Brookfield in twenty nineteen.

Speaker 1 (03:16):
For or lazy four point one billion dollars. But now
be Man health Scope has gone into receivership after its
struggle to repay its debt and keep its finance as
a fault now, Dazi boy. It blamed three key issues.
What was the first one? It was carrying too much debt.
We're talking at one point four billion bucks in debt.
It was paying huge rents on the hospital premises.

Speaker 2 (03:35):
And it claims that the amount of private health insurance
pay to private hospital is just too low.

Speaker 1 (03:40):
Yeap. Next minute, health Scope appointed receivers to sell off
the hospitals and Jazi boy, the Federal government has said
that a bailout is not going to happen under any conditions, particularly.

Speaker 2 (03:49):
Because health Scope is a private hospital owned by a
private equity giant.

Speaker 1 (03:53):
But with thousands of patients in the hospitals right now.
They've also got to stay open. So what is the
key learning here? When private equity enters sectors like healthcare
or education or aged care, things can get a bit messy.

Speaker 2 (04:05):
Yeah, because, b man, we know that the goal of
private equity is about maximizing financial returns.

Speaker 1 (04:10):
Yeap companies like Brookfield By companies often with a lot
of debt, and then try to make them more profitable.

Speaker 2 (04:16):
Which would be through cost cutting or price rises or restructuring, and.

Speaker 1 (04:20):
Then they aim to sell the companies for a gain.

Speaker 2 (04:22):
But when you apply that profit focused model to healthcare,
things can start to unravel.

Speaker 1 (04:26):
Because healthcare should be focused primarily on better patient outcomes.
But be maned.

Speaker 2 (04:30):
With up to ten companies already sending offers to the
receivers for health Scope, here's hoping the hospitals can continue
a smooth operation with its new owners.

Speaker 1 (04:38):
For our third and final story, Arnots is writing a
new wave of love for its timtams with its plans
to expand aggressively overseas.

Speaker 2 (04:47):
I know you'd be saying, God bless those gluten free
tymtams right now, be man totally me more.

Speaker 1 (04:51):
Well, Arnots is the one hundred and sixty year old
Aussie food icon and the local market leader when it
comes to biscuits.

Speaker 2 (04:57):
Yep, it's the maker of all your childhood and adulthood
favorites like your shapes, your tiny teddies, your Scotch fingers.

Speaker 1 (05:04):
Heaven bless those pizza shapes. May I add, but b Man,
Tim Tams are really having a moment right now. I
was thinking that they are always having a moment. To
be honest, juzzy boy, that's true. But get this, be Man.
Tim Tams now make up forty one percent of the
chocolate biscuit market in Australia. Wow, It's market share grow
by five point eight percent in the past year alone.

Speaker 2 (05:23):
And now Art has announced plans for international domination with
its trusty tim Tams.

Speaker 1 (05:28):
Yeah, it's planning to grow it's Timtam business in the UK,
the US, Canada and even Japan and b Man.

Speaker 2 (05:33):
It's also been pushing brand extensions with other brands in
the Art stable like Jats, Tim Tams.

Speaker 1 (05:39):
And brand extensions with its gluten free Range two which
is killing it and I one hundred percent endorse. So
what is the key learning here? Product line extensions are
when a company introduces new products within an existing brand.

Speaker 2 (05:51):
The goal is to teach new customers about existing products
and cater to their shifting preferences.

Speaker 1 (05:57):
The benefit of product line extensions is they reduce the
risk typically associated with new product launchers. Instead of starting
from scratch, brands piggyback off other familiar names like Timtams
or shapes and they just adjust the flavor or the format.
Take the Artt's gluten free range, be man It leveraged
the existing products in the Artet's range and change the
ingredients to make them more appealing to an underappreciated demographic.

(06:21):
In fact, Arnest's gluten Free Range is driving about eighty
percent of the growth in the gluten free biscuit market.
And what a market it is. So now, me man Or,
We're busy perfecting the Tim tamslamb Ardits is quietly taking
over the world and I'm here for it. Whatsam prayer
proval is going through the room, cash rate going down,
clearance rates going up. It's all happening in the property
market in Australia right now. We cover it all in

(06:42):
the Flux app with a deep dive into expert analysis
and predictions of what's going to happen to the housing
market in twenty twenty five, So if you want to
learn more, make sure to download the Flux app and
check it out. Thanks for listening, and we'll see you
on Friday.