Fresh from the Queensland Winter Carnival where horse racing has taken centre stage in the state for the past month, veterinary clinic operator Apiam Animal Health (ASX: AHX) will be coming home with a prized trophy having acquired Scenic Rim Vets for $16 million.
Scenic Rim Vets is made up of clinics in Beaudesert, a major horse racing town, and Boonah which functions as a mixed animal clinic. Between the two, the business employs 13 veterinarians and a support team which has established Scenic Rim Vets as one of the largest providers of equine veterinary services in Queensland.
“Scenic Rim Vets will be the third equine operated by Apiam and the acquisition is consistent with our strategy of operating best in class veterinary services through large high-performance centres being supported with smaller regional referral clinics in adjacent growth areas,” said Apiam Managing Director Chris Richards.
While Beaudesert hosts regular race meets and is one of the larger training facilities in Queensland, it is also within close proximity to many of Queensland’s top stud farms. The timing of the Scenic Rim Vets fits in nicely for Apiam with the Southern Hemisphere breeding season kicking off in August, but mares to commence their breeding protocols from July.
Total consideration for the acquisition will be $16m with $14.4m paid in cash and $1.6m in AHX shares. The cash component will be drawn down from Apiam’s existing debt facility with NAB which they have further extended to create headroom for future acquisitions.
Scenic Rim Vets will add $6.9m in revenue to Apiam on a FY21 pro-forma basis but is expected to generate additional revenue streams for Apiam’s other divisions, notably pathology where testing is critical to breeding and racehorse success.
While Apiam has long been a mixed-animal veterinary operator, the Company has recently been increasing its specialist exposure to the equine industry. This comes off the back of major investments in prize money for the industry and increased spending across the board.
For example, the average sale price for yearlings at the 2021 Inglis Easter Yearling Sale was $369,876, a 20% increase on last year’s $307,643.
The addition of Scenic Rim Vets now brings Apiam’s dedicated equine centres to three with their other two located in Warrnambool, Victoria and Maffra, Victoria.
Apiam’s other recent Queensland veterinary acquisitions in Clermont, Samford Valley, Salby and Tara are all in the process of integrating into Apiam’s national system.
For the Half Year ended 31 December 2020, Apiam Animal Health reported a 8.9% increase in revenue to $61.2m and a 53.8% increase in NPAT to $2.6m.
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