Shareholders of allied health company Healthia (ASX: HLA) are set for a handy payday after emphatically voting in favour of the Company to be acquired by funds manager Pacific Equity Partners (PEP).
The Scheme of Arrangement, which required a requisite majority of shareholders and votes, offered HLA shareholders $1.80 per share, valuing the clinic operator at $260 million, a 84.6% premium on the last closing price before the offer was lobbed on 31 August 2023.
Highlighting the overwhelming support behind the Scheme, 97.83% of shareholders voted in favour of the takeover, while 99.94% of votes cast were in favour.
Since listing on the ASX in 2018 at an IPO Offer Price of $1.00 per share with 95 clinics under their control, Healthia has emerged as the fastest growing allied health operator in Australia.
In the five years since, the network has grown to more than 300 clinics covering a range of physiotherapy, podiatry and optometry clinics with ancillary services.
In FY23, Healthia 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.
Shareholders that have been with Healthia from the start will be familiar with the leadership duo of Chairman Glen Richards and CEO Wesley Coote, who joined forces to lead Healthia after previously leading Greencross Vets under a similar operating model, also resulting in a substantial takeover from private equity.
With the Scheme now approved, Healthia shares are expected to be delisted from the ASX on 30 November 2023.
“The directors have worked effectively and constructively to bring the company to where it is today. It has been a privilege to work with the board,” said Richards.
“I would also like to acknowledge the talents and energies of the Healthia management team. They have built one of the leading allied health companies in Australia and should be proud of their achievements.
“The scheme transaction is an excellent outcome for shareholders. But it is also a good transaction for Harold Bid Co (funds managed by PEP) and PEP who acquires an amazing company with good prospects and talented staff.
“With PEP’s backing I believe 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.”
Pacific Equity Partners, founded in 1998, has established itself as a premier private equity firm in the Asia-Pacific region. Known for its expertise in identifying and nurturing businesses with substantial growth potential, PEP manages a diversified portfolio across sectors such as healthcare, consumer, industrial, and services.
The Healthia acquisition may be a sign of bigger things to come from PEP which is actively on the hunt for more businesses similar to Healthia that they believe have greater value in the privately held space.
The private equity giant, which has managed or advised funds on 41 completed platform transactions and more than 150 bolt-on acquisitions across a broad range of industries, with more than $8 billion in assets under management.
That will likely grow further in 2024 with PEP preparing to launch its seventh buyout fund – Fund VII – which is believed to be targeting $3 billion.
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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