MIR Forensic Analysis

1. Executive Summary

We are initiating a SHORT recommendation on Mirion Technologies (MIR) with high conviction. The current valuation prices in a decade of flawless execution and transformative acquisition synergy that is unlikely to materialize. The combination of a stretched >30x EV/EBITDA multiple, significant integration risk following the massive $585M Paragon acquisition, and clear no-confidence signals from top executives initiating 10b5-1 selling plans creates a compelling asymmetric short opportunity.

• •Thesis: Extreme valuation, high acquisition integration risk, and heavy insider selling create a negative asymmetric profile.
• •Current Price: $25.02
• •Market Cap: $6.20B
• •Enterprise Value: $6.47B
• •Analysis Date: 2025-12-07
• •Data Freshness: Primary data from Q3 2025 10-Q filed 2025-10-29.

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2. Recent Material Events (8-K Analysis)

Analysis of 8-K filings since the last 10-Q reveals the company's primary focus has been on its transformative acquisition and related financing activities.

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  💰 Financing & Acquisition (September/October 2025): The company confirmed the closing of a $375.0M convertible note offering and a 19.9M share public offering (priced at $21.35/share). The proceeds, totaling over $775M, are earmarked for the $585.0M acquisition of Paragon Energy Solutions, a major strategic pivot deeper into the nuclear services market. This is a bet-the-company move.

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  ⚠️ Post-Quarter Updates (November/December 2025): Filings in this period primarily relate to standard earnings release announcements and updates on the pending Paragon acquisition. The key takeaway is that the acquisition is expected to close before year-end 2025, setting the stage for integration challenges and synergy realization (or lack thereof) to become the main story in 2026.

The recent capital raises and pending acquisition have fundamentally altered the company's balance sheet and risk profile. The market has reacted positively so far, but the real test of execution begins now.

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3. Insider Trading Activity

🔴 Significant Red Flag: Recent insider activity is overwhelmingly negative and signals a lack of management confidence in the company's future stock performance, especially following a major capital raise.

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  CFO & CLO Selling Plans: The Q3 10-Q disclosed that on August 7, 2025, CFO Brian Schopfer adopted a Rule 10b5-1 plan to sell 100,000 shares. On August 11, 2025, CLO Emmanuelle Lee adopted a plan to sell 50,000 shares.

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  Execution of Sales: The flurry of Form 4 filings in November 2025 confirms these executives have begun systematically selling shares. The timing is highly suspect—initiating large, planned sales immediately following a dilutive equity offering and just before closing a transformative acquisition.

This is a classic insider signal. Executives are using the market's enthusiasm for the acquisition story as a liquidity event for themselves. This action speaks louder than any management commentary on a conference call.

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4. Current News & Market Context

The narrative surrounding MIR is dominated by the Paragon Energy Solutions acquisition. The market has bid the stock up ~17% from its $21.35 secondary offering price, indicating a bullish view on the deal's potential.

However, this optimism ignores the substantial risks:

1. •Massive Dilution: The company issued nearly 20M new shares and $775M in convertible debt to fund this and other activities. The 2030 notes, with a conversion price of $23.11, are already in-the-money, creating a clear path to further dilution.
2. •Integration Risk: Integrating a $585M acquisition is a monumental task. Failure to achieve projected synergies could lead to significant earnings misses and a rapid re-rating of the stock.
3. •Macro Headwinds: While the nuclear renaissance narrative is strong, the sector is subject to long project cycles, regulatory hurdles, and government budget risks.

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5. Business Model Analysis

### Revenue Mix

MIR operates in two segments with distinct drivers:

• •Medical (35% of Revenue): Provides radiation therapy QA, dosimetry, and nuclear medicine products. This is a stable, recurring business driven by healthcare procedure volumes and safety standards.
• •Nuclear & Safety (65% of Revenue): Sells radiation detection and monitoring equipment for nuclear power plants, defense, and research. This segment has higher lumpiness due to large, long-term contracts but benefits from the nuclear energy tailwind.

### Pricing Power

The company has demonstrated some pricing power, with price increases contributing to revenue growth in the latest quarter. However, many of its large nuclear contracts are fixed-price, exposing it to margin risk from inflation and cost overruns.

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6. Financial Health

### Revenue Quality & Cash Flow

• •✅ Accounts Receivable: AR decreased from $177.7M to $150.0M while YTD revenue grew 6.8%. This indicates strong collections and good revenue quality.
• •✅ Cash Flow: YTD Cash from Operations (CFO) improved significantly to $70.3M from $38.3M YoY. CFO is substantially higher than Net Income ($12.0M), which is a healthy sign.

### Balance Sheet

• •🔴 Leverage & Complexity: The balance sheet has become significantly more complex and levered. While cash is high at $933.2M, this is borrowed money. Total debt now stands at $1.20B, including $753.6M in convertible notes.
• •⚠️ Goodwill Risk: Goodwill and intangibles now represent ~55% of total assets. This is a major risk factor, as any underperformance from the Certrec or Paragon acquisitions could trigger massive write-downs.

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7. Valuation Analysis

MIR's valuation appears disconnected from its fundamental cash-generating ability.

• •Current Price vs. Filing Date: The stock price on the 10-Q filing date (Oct 29, 2025) was likely near the offering price of $21.35. The current price of $25.02 represents a significant run-up on acquisition optimism.

### Reverse DCF

To justify the current Enterprise Value of $6.47B, the market is pricing in extremely aggressive growth assumptions.

• •Assumptions: WACC of 9%, Terminal Growth of 2.5%, starting FCF of $60M (annualized YTD FCF, adjusted for growth).
• •Implied Growth Rate: The model requires a Free Cash Flow growth rate of approximately 18% per year for the next 10 years.

This level of sustained growth is highly improbable for a company in a mature, project-based industry. The valuation leaves zero room for error in execution.

### Comparables Analysis

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8. Competitive Position

MIR holds a strong position in niche markets, particularly in radiation detection and measurement. Its installed base at most of the world's nuclear reactors provides a significant moat and recurring revenue stream.

• •Strengths: Entrenched customer relationships, regulatory expertise, broad product portfolio.
• •Weaknesses: Vulnerable to government budget cycles, competition from larger, more diversified industrial players, and technological disruption.

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9. Management Quality

While management has successfully grown the company via acquisition, their recent actions raise serious concerns about alignment with shareholder interests.

• •🔴 Insider Selling: The decision by the CFO and CLO to establish large, pre-planned stock sales immediately after a major capital raise is a significant vote of no confidence. It suggests they may believe the stock is at or near a peak.
• •Capital Allocation: The aggressive, dilutive financing for the Paragon deal is a high-stakes gamble. If it fails, management will have destroyed significant shareholder value.

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10. Risk Factors

• •🔴 Valuation Risk: The primary risk is a severe multiple compression if growth falters or acquisition synergies disappoint. The current price is unsustainable without flawless execution.
• •⚠️ Integration Risk: Failure to successfully integrate Paragon could lead to operational disruptions, cost overruns, and missed financial targets.
• •⚠️ Dilution Risk: The $775M in convertible notes and ~20M new shares create a massive potential for future dilution, which will cap upside and exacerbate downside.
• •Goodwill Impairment: With over half of assets in goodwill/intangibles, a future impairment charge is a distinct possibility and could erase a significant portion of book value.

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11. Forensic Accounting Flags

• •🔴 Insider Selling: The timing and magnitude of planned executive stock sales is the most significant forensic red flag.
• •⚠️ High Stock-Based Comp: YTD SBC of $11.2M is nearly equal to YTD Net Income of $12.0M. This non-cash expense significantly inflates GAAP earnings relative to the true economic cost to shareholders.
• •⚠️ Aggressive Acquisition Accounting: The high proportion of goodwill suggests the company may be overpaying for acquisitions, with the risk of future impairments.

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12. Short Thesis

MIR represents a compelling short opportunity based on three core pillars:

1. •Unsustainable Valuation: The stock trades at over 30x forward EBITDA, implying a decade of ~18% FCF growth that is highly unlikely to be achieved. This premium is built on the narrative of the Paragon acquisition, not on current fundamentals.
2. •Execution Risk: The company is attempting to integrate its largest acquisition ever, funded by dilutive capital. The probability of hitting aggressive synergy targets is low, and any miss will be punished severely by the market.
3. •Clear Management Signals: Top executives are not waiting to see if the acquisition is successful; they are selling now. Their 10b5-1 plans are a clear signal that they view the current stock price as an attractive exit point.

The catalyst for a price correction will be the market's realization that the promised synergies from the Paragon deal are not materializing, which we expect to become evident in the first half of 2026.

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13. Catalysts & Timeline

• •Q4 2025 Earnings (Feb 2026): First look at post-acquisition guidance. Any softness will be punished.
• •Q1 2026 Earnings (May 2026): First full quarter with Paragon. The market will scrutinize synergy numbers and integration progress.
• •Insider Selling Reports (Ongoing): Each Form 4 filing showing continued sales by the CFO and CLO will reinforce the negative thesis.
• •Potential Goodwill Impairment Test (Q4 2026): If integration stumbles, the annual impairment test could be a major negative catalyst.

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14. Price Targets

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15. Investment Recommendation

SHORT with a High Conviction (8/10).

The risk/reward is skewed heavily to the downside. The current price reflects a perfect-world scenario, while the combination of integration risk, dilution, and insider selling points to a high probability of significant downside over the next 6-12 months.

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16. One-Liner Thesis

MIR is a compelling short candidate due to its extreme valuation, significant integration risk from a massive debt-and-dilution-fueled acquisition, and clear no-confidence signals from top executives selling stock.