Healthia emerges as largest physiotherapy provider with $88m acquisition, more growth still to come

For someone who’s just guided a company to land a significant acquisition, Wesley Coote of Healthia (ASX: HLA) is arguably far too humble. 

The ‘hidden gem’ stock is being steadily uncovered by an increasing number of investors who have been impressed by Healthia’s compounding success.

Amongst others, the Company is led by the clever people who established, grew and subsequently sold Green Cross Vets for a whopping $970 million, Healthia is essentially the human equivalent. 

Key to their growth is their acquisition strategy. With each seemingly better than the last, the latest in a string of acquisitions is the largest in the Company’s history. 

Healthia has acquired Back in Motion Health Group, a physiotherapy operator comprising 64 clinics, for an agreed $88.4 million. This acquisition will add 12.7% earnings per share accretive on an FY21 underlying basis. 

Healthia has a clearly outlined acquisition budget of $20 million per year, but an opportunity like this called for flexibility. 

“While a lot bigger than the $20 million, at $88 million, it does fit and align nicely to our goals,” says Wes. 

“We identified that our two organisations were very closely aligned with our philosophies about our team members, how we operate and with our outcomes that we are looking to achieve for our patients.”

Patients really are the central focus to everything at Healthia, but Wes highlights that there is a lot of value for shareholders in this deal too.  

A performer on its own, Back in Motion generated $62.9 million in revenue for FY21 and rounded out the year with an underlying EBITDA of $12.3 million. 

Healthia experienced notable growth too, as Wes points out. “We delivered underlying revenue of $40 million, which included organic growth of 9.1% in that number. Our underlying EBITDA was about $21.4 million.”

“We’ve got a number of organic activities as part of what we do here at Healthia, I guess the most important to us, and the most fundamental one is to ensure that our clinical teams are engaged and showing up for their patients every day. To keep that going we have a number of engagement strategies, the most important one being our industry leading education and professional development programs.” 

Highly engaged clinicians will ultimately provide a better patient experience and higher quality care so it’s no surprise that this is a huge priority for Healthia. 

“Other organic activities include co-locating services within our existing businesses and continuing to increase the number of clinicians inside our business, delivering services to our patients. This also then opens up the opportunity for further cross referrals across the Healthia network.” 

The co-location strategy has been particularly successful with the integration of audiology into existing Healthia optometry clinics, following significant government investment into hearing health. 

With impressive portfolio growth and some nice numbers on the balance sheet, Healthia is certainly one to add to the watchlist. 

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