The rapidly increasing number of pet owners in Western Victoria will soon have access to new industry leading vet services with Apiam Animal Health (ASX: AHX) acquiring Horsham Veterinary Hospital as part of their expansion strategy in regional growth corridors.
The acquisition will see Horsham Veterinary Hospital join eight other clinics owned by Apiam in the western district.
“The acquisition of Horsham Veterinary Hospital is expanding our reach into important regional communities, where companion and mixed animal ownership continues to accelerate rapidly,” said Apiam Managing Director, Dr Chris Richards.
“This acquisition also fits well within our existing Western Victorian clinic network, and there are many immediate operating benefits identified.”
The Acquisition will add $2.55 million in revenue and $0.4 million in EBITDA to Apiam on a FY21 pro forma basis with total consideration of $2.0m comprising $1.6m cash, $0.2m in AHX shares escrowed for 12 months and $0.2m in shares escrowed for 24 months.
Among the operating benefits referenced by Dr Richards will be the introduction of Apiam’s Best Mates program where pet owners can purchase an annual membership ($575) to secure unlimited consultations throughout the year. Since launching in 2019, the program has been hugely popular amongst Apiam’s network of 63 animal health businesses to now have more than 5,500 members.
Growth in the program has followed increased pet ownership through the pandemic as Australians have turned to animal companionship to navigate lockdowns while also working from home. This was highlighted in a 2021 study conducted by Animal Medicines Australia (AMA) which reported 6.8 million Aussie households now owning a pet, 15% more than pre-pandemic.
The same study revealed that Aussies spend $30.7 billion per annum on cats and dogs at an average of $2,074 per cat and $3,237 per dog on food, veterinary services, and pet healthcare products.
On the incoming side of the acquisition, Horsham Veterinary Hospital joins a growing list of clinics to have joined the Apiam network where Apiam has deployed more than $25m on clinic acquisitions over the past 12 months.
Beyond the strong financial returns delivered by Apiam, which recently reported a 16.7% increase in revenue to $34.6m and 26.4% increase in gross profit to $21m for the September quarter, the Company’s people-focused support services have proven popular amongst industry professionals.
Upon integration into the Apiam network, Horsham Veterinary Hospital will be able to provide its customers with Apiam’s tele-triage service whereby a centralised vet nurse handles out-of-hour calls. Should the matter escalate beyond the nurse’s advice, they can then contact the vet on duty within the region to tend to the matter. This has been hugely popular amongst vets that had previously struggled to maintain work-life balances when always being on call for emergencies.
Other support services owned and operated by Apiam include pathology, vaccine manufacturing, genetics, digital farming databases, food products and pet supplies which are integrated into clinics to leverage their operating expenses.
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Alfred Chan is an Analyst at Emerald Financial, specialising in ASX-listed small cap companies.
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