Austco to fast-track hospital sales in Aus with $10.6m acquisition of Amentco

After announcing a potential share price agreement to acquire Amentco in February 2024, Austco Healthcare (ASX: AHC), a healthcare workflow management solutions company, is going full steam ahead with execution. It will wholly acquire Amentco, a communications hardware and software solutions provider and certified Austco Nurse Call reseller, for $10.6 million. 

The acquisition will fast-track Austco’s plan to build direct sales capability in Australia, replicating the model Austco uses in the United States, Canada and Singapore. It will allow Austco to expand its offering to Australian hospitals and aged care providers, including other integrated low-voltage solutions.

Austco plans to merge Amentco’s extensive business with its current operations, which span hundreds of sites and include important security solutions customers across Queensland. Key personnel from Amentco will be retained to facilitate a seamless customer and employee transition. 

Amentco will be acquired cash-free and debt-free for a total purchase price of $10.6 million based on 3.5 times the FY23 EBITDA. This acquisition will yield substantial revenue synergies by enabling cross-selling products and services and streamlining operational processes. 

In the initial announcement in February, Austco Healthcare CEO Clayton Astles commented, “With Amentco’s expertise and reputation in the healthcare and security communications industry, coupled with its strong customer relationships, the acquisition will boost our competitive standing and growth opportunities for Austco Healthcare.”

Amentco specialises in the installation, service and maintenance of Nurse Calls, Customised Workflow, Real-Time Locating (RTLS) Security, CCTV and Access Control Systems. It designs and installs integrated solutions that help enhance patient care, improve efficiency and minimise risk. Its loyal customer base comprises public and private enterprises, predominantly in healthcare and aged-care sectors across Queensland, Australia. Amentco is forecast to achieve approximately $13 million in revenue and $3 million in EBITDA in FY24.

The acquisition of Amentco offers significant benefits to Austco Healthcare. For one, Austco Healthcare will get to expand its market presence in Australia and increase its regional market share. Second, Amentco’s communication and security solutions expertise complements Austco Healthcare’s existing healthcare-focused offerings. By incorporating Amentco’s security products and services, Austco can provide a comprehensive solution to its clients, enhancing customer satisfaction and loyalty.

Third, the acquisition presents opportunities for revenue synergies through cross-selling products and services. Austco can introduce Amentco’s security solutions—and vice versa—to its partner healthcare facilities. Fourth, this consolidation of products can result in cost savings and operational efficiencies. It will streamline processes, share resources, and optimise workflows, which can reduce overhead costs. 

Fifth, retaining key personnel from Amentco ensures continuity and expertise within the merged entity. Finally, by combining resources, expertise, and market reach, Austco Healthcare gains a stronger competitive position in Australia’s healthcare and security sectors. 

In April, Austco announced a $9.7 million capital raising, from which $5 million will be dedicated to the settlement of this acquisition. The acquisition is expected to be completed by May 1, 2024 and will be immediately earnings accretive, not including any revenue synergy benefits.