Siemens' Financing Solution for Tri-State - Analyst Blog
November 19 2013 - 6:08PM
Zacks
Siemens Financial Services (SFS), the financing arm of
industrial goods manufacturer Siemens AG (SI),
recently offered a customized financial package to medical imaging
company Tri-State Imaging Group to refinance its existing debt and
fund its expansion plans in Florida. In addition to strengthening
the business relationship with one of Siemens’ existing healthcare
clients, the transaction is mutually beneficial for both the
subsidiary and the parent company.
The Key Takeaways
In order to increase liquidity and boost the working capital
requirements, SFS provided Tri-State with a $50 million loan
payable in 5 years. Tri-State is likely to utilize a part of the
loan proceeds to refinance its existing debt to reduce its interest
burden. The remainder of the proceeds is likely to be used to
expand its presence in the outpatient diagnostic imaging services
market in Florida through the purchase of 16 new medical imaging
centers.
The transaction reinforces the long-standing business relationship
of Tri-State with Siemens. At the same time, it offers additional
revenue stream for Siemens through new orders for medical imaging
equipment and extension of equipment maintenance service contract
with Tri-State.
On the other side of the spectrum, the transaction augments SFS’
position as a leading financier in the healthcare sector. This
Siemens’ subsidiary provides structured finance and commercial
finance in the energy, healthcare and infrastructure sectors and
plays a key role in financing the supply chain of the industry by
leveraging its financial expertise and technical know-how.
Moving Forward
Siemens Healthcare is one of the rapidly growing segments of the
company with a healthy underlying profitability. The financing
solution package with Tri-State, one of the leading independent
providers of outpatient diagnostic radiology services in the
Delaware Valley, offers more and new opportunities for the segment
to augment its revenues.
Siemens continues to deliver innovative technological and financing
solutions for its customers. It aims to provide solutions that give
the maximum operational benefit to its clients. Siemens focuses on
key areas like information services, automation and controls,
medical equipment, power generation, transportation systems,
automotive electronics, lighting, and other similar areas. Given
its product breadth and geographic diversity, the company is a
major beneficiary of increased spending as developing nations build
up their infrastructure.
Siemens currently has a Zacks Rank #2 (Buy). Other players in the
industry worth reckoning include Garmin Ltd.
(GRMN), Control4 Corp. (CTRL) and Mistras
Group, Inc. (MG), each carrying a Zacks Rank #2 (Buy).
CONTROL4 CORP (CTRL): Free Stock Analysis Report
GARMIN LTD (GRMN): Free Stock Analysis Report
MISTRAS GROUP (MG): Free Stock Analysis Report
SIEMENS AG-ADR (SI): Free Stock Analysis Report
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