It has not taken long for private enquiry firms to circle Healthia (ASX: HLA), Australia fastest growing physiotherapy and podiatry operator which has received an offer to be 100% acquired for $260 million.
The binding Scheme Implementation Deed comes from Harold BidCo, an entity owned by funds advised by Pacific Equity Partners (PEP) at $1.80 per share which represents an 84.6% premium on HLA’s last close price of $0.975.
The offer has already received the support of major shareholders MA Financial Group, Wilson Asset Management and Regal Funds Management which collectively control 26.8% of Healthia’s shares.
Should there not be a superior offer received by Healthia, the Board has recommended shareholders accept the offer, where they have the option to receive $1.80 per share owned in cash, retain their shares in the new ownership structure as an unlisted Company, or mix-and-match the two options.
Commenting on the offer, Healthia Chairman Dr Glen Richards said: “The Healthia Board has unanimously concluded that the Scheme represents a very attractive outcome for our shareholders, clinic partners, patients, clinicians and team members. In the Healthia Board’s view, the all-cash price at a significant premium to Healthia’s recent share price reflects the inherent value of Healthia’s business operations, national platform and growth strategy in Australia and New Zealand.
“Under the Scheme, there will be no change to Healthia’s clinic class shareholder model and clinic class shareholders will continue to hold those shares. Healthia’s clinic class share model forms an important part of the Healthia clinic-led business model and clinician retention program, which is supported by Healthia’s head office support team and functions.”
The offer for Healthia comes following sustained growth both organically and via acquisitions since Healthia listed on the ASX in 2018.
In that time, Healthia has expanded its network of clinics from 95 to now operate more than 300 across Australia and New Zealand, covering a range of physiotherapy, podiatry and optometry clinics.
Key to Healthia’s growth has been their ability to consolidate the hugely fragmented industry, and improve acquired clinics through their support services which cover marketing, HR, finance, IT and supply chain.
This was reflected in Healthia’s FY23 results where the Company reported $255.9 million underlying revenue which represented a 26% increase on the previous year.
This flowed down to a 56% increase in underlying EBITDA of $38.3 million and 88% increase in underlying NPAT to $23 million.
For active shareholders that have been following Healthia, the acquisition is likely to come as no surprise given the profile of Dr Richards who previously founded Greencross Vets which was also acquired by private equity at a large premium, and has also featured prominently on television on Shark Tank.
Since listing on the ASX, Healthia has been led by Managing Director Wesley Coote who has also previously been involved with Greencross and has been vital in identifying acquisition opportunities for Healthia.
A Scheme Meeting is tentatively scheduled to take place in November 2023 where shareholders will be given the opportunity to vote in favour or against the acquisition.
“We believe that with PEP’s backing there will be increased avenues to expand Healthia’s presence in its target markets and verticals, offering our team members further career progression and growth opportunities,” added Dr Richards.
“Under the transaction, a number of directors and key management personnel will maintain an ongoing equity interest in Healthia, on the same terms available to other shareholders under the Scheme, demonstrating their ongoing confidence in the future of this business under PEP ownership.”
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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