Apiam (ASX:AHX) doubles its Queensland-based veterinary clinics with three acquisitions

Summary

  • Apiam Animal Health has announced the strategic acquisition of three Queensland-based veterinary clinics, doubling the number of its clinics in the state.
  • The Company disclosed that the acquisitions are anticipated to add ~AU$10 million in revenue.
  • The acquired businesses will help accelerate Apiam’s presence in the attractive and fast-growing southern Queensland region.

Australia's leading veterinary firm Apiam Animal Health Limited (ASX:AHX) has acquired three Queensland-based veterinary organisations - Samford Valley Veterinary Hospital, Clermont Veterinary Surgery and Knox Veterinary Clinic. The total combined consideration for the businesses is AU$6.7 million.

Meanwhile, ASX 200 today is up 0.13% (or 9.4 points) at 10:27 AM AEST. The top-performing stocks include Nickel Mines Limited (ASX:NIC), Oz Minerals Limited (ASX:OZL) and NRW Holdings Limited (ASX:NWH).

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The animal health industry has been flourishing amid COVID-19 with pet stocks faring well. Some of the ASX-listed animal health stocks include Blackmores Limited (ASX:BKL), Cannpal (ASX:CP1), and Ecofibre Limited (ASX: EOF).

MUST READ: Two Australian pet care stocks that offered decent 3-month returns

With this backdrop, let us look at the deals more closely.

Apiam’s strategic acquisitions

Apiam is confident that the three acquisitions are geographically strategic for the Company and represent attractive opportunities to grow its revenue base in the region.

With the acquisitions of three clinics, Apiam has doubled its veterinary clinics in Queensland from four to eight. In addition, the Company has also added 31 veterinarians to its operations.

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Dr Chris Richards, the Managing Director of Apiam, commented-

The Company disclosed that the acquisitions are anticipated to add ~AU$10 million in revenue to Apiam, with an estimated completion date of 1 June 2021 for the Samford Valley acquisition. Furthermore, Apiam completed the settlement of Clermont Veterinary Surgery on 21 May 2021 and Knox Veterinary Clinic on 1 April 2021.

ALSO READ: Animal health industry thrives during COVID-19, Flick Through CannPal (ASX:CP1) and Apiam (ASX:AHX)

Acquisitions to accelerate Apiam’s Presence

Apiam highlighted that these acquisitions are consistent with the regional expansion strategy of the Company.

Notably, the acquisitions will accelerate Apiam’s presence in the attractive and fast-growing southern Queensland region. This region has witnessed a significant demographic shift over recent years, with populations increasing rapidly.

The Company also disclosed that additional revenue opportunities could be derived by establishing specific clinics and offering several service programs, including Best Mates and ProDairy, across a larger customer base.

Apiam highlighted that the total combined cash consideration payable for the acquisitions is AU$5.7 million and will be funded using existing funds due to Apiam’s strong cash flow.

On 27 May 2021, AHX shares were trading at AU$0.890, up 2.298% at AEST 10:38 AM.

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