Having tripled their network of allied healthcare businesses since listing on the ASX four years ago to now be operating 309 businesses, Healthia (ASX: HLA) is on the move again with institutional investors keen for a bigger slice of the pie by backing the company with $10 million to accelerate its growth.
The $10 million has been raised from institutional investors, in a clear show of confidence behind Healthia’s strategy to become Australia’s largest diversified allied health portfolio. Within that portfolio includes a spread of allied health services, anchored by podiatry, physiotherapy and optometry while other services including hand therapy, audiology and clinical Pilates are being added as new services in Healthia clinics.
Of their 309 businesses, 95 were added in FY22 alone, a year that Healthia emerged as the largest physiotherapy operator in Australia, where it will look to move up the ranks in their other disciplines too, through strategic acquisitions.
Committed to deploying $20 million per annum of acquisitions that they can improve through to introduction of their support services and co-location of new allied health services, Healthia confirmed the first of those for FY23 last week when acquiring 12 allied health businesses.
Those included Sunshine Coast Hand Therapy (2 clinics), Watsonia Physiotherapy (1 clinic) and Corio Bay Health Group (9 clinics).
Combined, those 12 clinics will contribute $8.88m in revenue and $1.87m in underlying EBITDA to Healthia.
Total consideration for the acquisitions was $8.29m, comprising $6.61m cash and $1.67m Clinic Class Shares. The cash component will be funded from free cash flow and Healthia’s finance facility but most notably for shareholders, the clinics were acquired at an average EBITDA multiple of just 4.4x.
That 4.4x multiple was lower than the 4.6x multiple across their FY22 acquisitions, excluding the Back In Motion acquisition (7.5x), highlighting the buying power Healthia is building as the market leader in the space as independent clinic owners continue to knock on Healthia’s door looking to get a deal done.
While those 12 acquired clinics will be funded from Healthia’s current balance sheet, the $10m raised from institutional investors at $1.47 per share will be put towards future near term acquisitions, of which there are 110 businesses that Healthia CEO Wesley Coote and his team are in discussion with.
Should those discussions progress towards an agreement for Healthia to acquire them, those earning-accretive businesses would be added to the current run rate of $40 million EBITDA that Healthia is on track towards in FY23. At just the bottom end of that guidance, it would represent a 63% increase in earnings for Healthia but that number is almost certain to be higher as they deploy their $20m per annum towards profitable businesses that they improve further, organically.
Given that all Healthia directors participated in the $10 million capital raise, it looks like they have a pretty impressive pipeline of businesses in the mix.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
Latest posts by Alfred Chan (see all)
- Harris Technology to expand refurbished tech division amid rising demand from cost-conscious Australians - April 30, 2025
- Harris Technology secures major investment from Taiwan’s FSP Technology at 100% premium - March 10, 2025
- ARC Funds acquires 30% of auzbiz Capital as latest direct-to-investor marketing venture - October 8, 2024
*Owners of this website are shareholders in a company mentioned in this article and have been engaged by them to assist in investor communications
Leave a Comment
You must be logged in to post a comment.