Vet clinic owners in Western Australia may soon have a knock on their doors with Apiam Animal Health (ASX: AHX) entering the State for the first time following legislative changes that had been untouched for more than 40 years.
The new legislation came into effect in June 2022 with Veterinary Practice Regulations 2022 effectively replacing the Veterinary Surgeons Act 1960 and Veterinary Surgeons Regulations 1979. The update was made following consultation from the professionals within Western Australia which now enables vet practices to be owned by corporations (such as Apiam) and brings their laws in line with the rest of Australia.
Marking their first move following the legislative changes, Apiam has acquired Harradine & Associates which operates practices in Bunbury and Dalyellup.
“This acquisition is an important expansion into an attractive region for us. We see strong growth potential in regional Western Australia, with opportunities to introduce new services and products into these veterinary markets,” said Apiam Animal Health Managing Director, Dr Chris Richards.
“We look forward to continuing to assess further opportunities in this region and continuing to deliver on our Accelerated Growth strategy in the year ahead.”
In FY22, Harradine & Associates generated $4.4 million revenue from their two practices, which employs 29 team members, including 9 veterinarians. Its earnings were not disclosed but the acquired revenue will contribute towards Apiam’s stated goal of reaching $300m revenue by FY24 having reported $178.3m in FY22 from their network of 74 animal health practices.
Total consideration for the practices is $2.6m, comprising $2.08m in cash and $0.52m in AHX shares. 50% of those shares will be held in escrow for 12 months and the remainder for 24 months.
Similar to their recent acquisitions in Victoria, the Bunbury practice is well exposed to the equine industry which has been a pathway of growth for Apiam which has been capitalising on major industry investments. In addition to Bunbury being one of WA’s largest equine training facilities, the practice has four experienced veterinarians dedicated solely to equine animal health.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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