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Highlights
- Acquisitions have proven to be a great way for business expansion
- AHX has implemented binding agreements to acquire the assets of Victorian Equine Group and Romsey Veterinary Surgery
- Ramsay recently completed 100% acquisition of Elysium healthcare, a UK-based mental healthcare provider.
A common term used in business parlance, mergers and acquisitions (M&A) refer to association of companies or assets through various financial transactions. In an acquisition, one company purchases another, while in a merger, two firms combine and form a new legal unit under one name.
An acquisition is a great way to grow one’s business as it increases the company’s size and value. It synergises core competencies, reduces costs and secures supply chains.
In this article, we will talk about two recent acquisitions in the ASX healthcare sector.
Related read: Monash IVF (ASX:MVF) widens clinical footprint, snaps up PIVET Medical Centre
Apiam ramps up growth strategy with two acquisitions
Apiam Animal Health (ASX:AHX) is expanding its regional scale and is on its way to execute two significant acquisitions. Today, the company provided an update about entering into binding agreements to acquire the assets of Victorian Equine Group (VEG) and Romsey Veterinary Surgery.
It is expected that the settlement of Romsey Veterinary Surgery will take place on 1 June 2022, while VEG settlement will be done in the month of July this year. The total cost of the acquisitions is AU$13.75 million.
How will the acquisitions benefit Apiam?
Victorian Equine is one of Australia’s market leaders for equine specialist surgical referral. Its services include surgical, diagnostics, reproduction, and hospitalisation. VEG is expected to earn AU$5.5 million of revenue in FY22, demonstrating a 20% year-on-year growth.
VEG will add the presence of a leading specialist equine down the East Coast region. The current Victorian equine clinics of Apiam will not have to refer to third party equine specialists.
Romsey Veterinary Surgery Pty Ltd is in Melbourne and is a mixed animal and equine clinic with a strong track record of performance. It has demonstrated 28% revenue growth in FY21, and it is projected to deliver AU$3.3 million in FY22.
Apiam is in a good position with adequate funding to execute additional strategic acquisition opportunities in the coming months. It has also secured bank approval to increase its acquisition facility by AU$20million.
Shares of Apiam Animal Health closed on Thursday with a gain of 7.482% at AU$0.790.
Ramsay Health Care acquires a UK-based mental healthcare provider
Ramsay Health Care (ASX:RHC) is a quality healthcare provider based in Australia with operations in the UK, Europe and Asia. Ramsay is involved in clinical practice, teaching, and research across a global network spanning ten countries. It has facilities across more than 460 locations and employs over 80,000 people globally.
Earlier in February, Ramsay completed 100% acquisition of Elysium healthcare, a UK based mental healthcare provider.
Significance of the acquisition
Elysium operates long-term medium and low secure hospitals and complex care homes for people with mental health conditions. It has a strong partnership with the National Health Service (NHS).
Image source: © 2022 Kalkine Media®
Shares of Ramsay closed on Thursday at AU$78.780.
Also read: ALT and CDX: Why these ASX healthcare stocks were in news today
