Leading allied healthcare company Healthia (ASX: HLA) is set to significantly increase their services and national footprint with the $43 million acquisition of optometry group The Optical Company and their 41 clinics.
The acquisition is a horizontal expansion for Healthia which has primarily operated in the podiatry and physiotherapy sectors while also owning iOrthotics, Australia’s largest manufacturer of 3D-printed orthotics.
With the addition of The Optical Group’s (TOC) 41 optometry clinics and frames distribution business, it will increase Healthia’s total network to 194 businesses which are present in all Australian states, as well as an iOthotics manufacturing facility in New York servicing North America.
“The opportunity to acquire a highly complementary allied health business of the quality and size of TOC is compelling,” said Healthia CEO, Wesley Coote.
“TOC is a natural fit with Healthia and its stated strategic objectives of acquiring value accretive businesses in the allied health industries. TOC also provides Healthia with the expertise, people, platforms and systems required for continued organic and acquisitive growth in the optometry industry”.
Upon joining the Healthia network, TOC will form the new Eyes & Ears division of Healthia which signals plans to capitalise floorspace of leased locations following the same strategy employed from their podiatry and physiotherapy divisions which delivered a 36.9% increase in net profit for Healthia through FY20 to $4.63m.
Consistently profitable having originally been founded in 2006 by Colin Kangisser, who will join Healthia as an Executive Director and lead the Eyes & Ears division, TOC had underlying revenue of $35.8m in FY20 which delivered $2.8m underlying net profit after tax.
The $43m acquisition will be funded by $15m of their existing debt facility, $8.9m in HLA shares to be held in escrow, $2.3m from existing cash reserves, $3m on deferred terms and $15.3m to be raised from shareholders as an Entitlement Offer partially underwritten by Canaccord.
Despite the challenges of COVID-19, Healthia has continued to perform well, reporting 10.9% organic revenue growth for the Quarter ending 30 September 2020 and forecasts the acquisition to deliver circa 15% Earnings Per Share.
*Owners of this website are HLA shareholders
Alfred Chan is an Analyst at Emerald Financial, specialising in ASX-listed small cap companies.
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[…] announced the acquisition of The Optical Company and its 41 optometry clinics, Healthia (ASX: HLA) Chairman Glen Richards and CEO Wesley Coote caught up with Emerald […]
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