Healthia acquires 10 new allied health clinics amid end of year healthcare spending boom

If you’re one of the 14 million Australians with private health insurance, there’s a good chance you’ll be knocking on a door owned by Healthia (ASX: HLA) to utilise your extras coverage for a new pair of glasses or orthotics before the benefits lapse at the end of 2021. 

That’s because Healthia already has 292 allied health businesses offering those services and that number is set to increase to 302 with their fresh acquisition of 8 optometry clinics and 2 physiotherapy clinics. 

Two years into the pandemic, lockdowns have limited Australians from visiting their optometrist, podiatrist of physio which was reflected in several major health funds offering refunds to policyholders. With all major Australian cities now open again, those that have not already booked appointments may find it very difficult to get one before the end of 2021. This is how busy the allied health industry is at the moment with transactions having to be processed within the calendar year before benefits lapse as deadweight losses. 

The newly acquired clinics by Healthia include 8 optometry businesses trading under the LensPro Optometrists brand in South-East Queensland, Hervey Bay Physio & Allied Health in Queensland and Mornington Peninsula Family Physiotherapy in Victoria. 

The addition of these 10 new clinics is part of Healthia’s strategy to expand their allied health portfolio where new clinic additions are driving the Company’s organic growth as they become integrated into the network.

In FY21, Healthia reported 9.1% organic growth across the Group where they provide back office support, national marketing services and supply chain management which enables clinicians to focus on providing optimal patient outcomes. This combination of support services, while alleviating their clinician partners of administrative duties, have been instrumental to the rising number of clinicians seeking to join the Healthia network. 

The acquisition of these 10 clinics continues a very busy six months for Healthia which included their $88.4m acquisition of Back in Motion Group’s 63 physiotherapy clinics across Australia and New Zealand. That number was previously 64 until one failed to meet settlement requirements.

Total upfront consideration for these 10 clinics is $8.6 million, comprising $7.67m cash and $0.93m in Healthia’s clinic class shares. Combined, they are expected to deliver Healthia $9.52m revenue and $1.90m EBITDA on an annualised basis. 

Adding these 10 new clinics to their other recent acquisitions, Healthia has acquired $82.9m annualised revenue and $15.9m underlying EBITDA over the past 6 months which will contribute towards their FY21 financials as Healthia drives organic growth from the acquired clinics through their vertical integration model.

The massive influx of private health claims come from Australians seeking to capitalise on their benefits, where they were not able to during the year due to Government-enforced lockdowns. 

Although Healthia maintained their operations open throughout pandemic lockdowns being classified as ‘essential community services’ under government directives, the Group still reported 1,533 clinic days (5% of total operations) impacted by COVID lockdowns. This meant that clinics were open, but patients were only booking appointments if they could not put them off. These are the patients that had been putting off their new glasses or new orthotics until lockdowns were lifted, resulting in rapid demand across the allied health industry for services provided by Healthia.