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Healius Ltd (ASX:HLS), a prominent player in the Australian healthcare sector, is experiencing significant volatility in its share price following the announcement of a major asset sale. After closing Friday at AU$1.61, shares surged by 6.5% in early Monday trading to AU$1.715, only to drop back to AU$1.59, reflecting a 1.4% decline shortly thereafter. This erratic performance stands in contrast to a broader market decline, with the S&P/ASX 200 Index down 0.8% at the same time.
The fluctuation in Healius shares comes on the heels of the company's binding agreement to sell its Lumus Imaging subsidiary to funds managed by Affinity Equity Partners for an enterprise value of AU$965 million, excluding cash, debt, and equipment leases. Healius expects to net approximately AU$835 million from the transaction after repaying equipment leases and accounting for any closing adjustments, with estimates suggesting over AU$800 million remaining after transaction fees and other costs.
This divestment is noteworthy, as it is projected to generate a multiple of 17.0 times the company’s FY 2024 earnings before interest, taxes, depreciation, and amortization (EBITDA), and 25.4 times FY 2024 EBIT. Management asserts that the sale will not negatively impact the operational performance of Healius' remaining businesses. Post-transaction, the company will maintain a significant net cash position and will have offloaded around AU$91 million in equipment lease liabilities.
Healius CEO Paul Anderson described the sale as a "positive outcome" for shareholders, employees, and patients. He emphasized that the divestment would provide the resources and focus necessary to enhance the company’s Pathology operations and return cash to shareholders. “As a clinically driven, large-scale Pathology business, Healius delivers critical diagnostic services to millions of Australians each year, and we are excited by the opportunities to grow and improve the business,” Anderson stated.
Mark Chudek, managing director at Affinity Equity Partners, also commented positively on the acquisition, noting that Lumus Imaging is an exceptional business that aligns with Affinity's investment strategy focused on high-quality companies with significant growth potential.
While the transaction is still subject to customary conditions, it is not contingent on financing. Healius has committed to providing transitional services to ensure continuity for Lumus' doctors and patients.
Despite the ups and downs following this announcement, Healius shares are down 4% year-to-date. The market's reaction underscores the uncertainty investors feel regarding the future trajectory of the company post-divestment, as it navigates the evolving landscape of the Australian healthcare sector.
