Australia’s fastest growing allied health company Healthia (ASX: HLA) could soon be on the acquisition path with shareholders backing the Company to capitalise on the more than 110 businesses that they are in discussions about acquiring.
Strengthening their balance sheet, shareholders strongly supported Healthia to the tune of $11.1 million from the Company’s capital raise where shareholders were offered an opportunity to acquire new shares at $1.47 each.
Combined with existing cash reserves and their undrawn finance facility, Healthia has more than $32 million in liquidity that can be deployed towards acquisitions, of which all that have been made by the Company in the past three years have been earning-accretive.
For vendors of those 110 allied health businesses, joining the Healthia network (currently 309 businesses) is a win-win scenario where they gain access to Healthia’s marketing, supply chain, human resources and accounting support, while also being able to retain partial ownership and profits generated from their clinics.
“Healthia now has more than 110 businesses that we have commenced acquisition discussions with, and that number has been consistently growing with vendors interested in gaining access to Healthia’s support services,” said Healthia CEO, Wesley Coote.
“We first listed on the ASX in September 2018 with 104 businesses, we now have more than 300 and this could not have been achieved without the support of our shareholders, including those that have supported us in the recent $11.1 million capital raise.”
Unlike other ASX-listed companies that operate in the sector consolidation space, Healthia operates a unique Clinic Class Shares (CCS) model which enables the Company to make more acquisitions by issuing equity in individual clinics, rather than the entire Healthia company. These CCS shares reward clinicians that perform best, without diluting HLA shareholders via the issuing of HLA shares – avoiding dilution but maximising the scalability of the acquisition growth.
Companies without this unique model, tend to issue shares to vendors that can be freely traded on the ASX.
“Pre-pandemic, we were seeing excellent organic growth in clinics that had joined the Healthia network. While the pandemic stalled that growth due to higher staff absenteeism and patient cancellations during the last 8 months, we were pleased to see that business had returned to near pre-pandemic levels from the period May to September which has Healthia on track for more than $40 million underlying EBITDA in FY23,” added Coote.
That $40m figure, which is a low-end estimate, would have Healthia trending to more than 63% year-on-year growth in earnings. This will be driven by an influx of allied health appointments across their podiatry, physiotherapy and optometry clinics where pandemic data showed 55% of Australians were happy to defer non-urgent allied health appointments.
With more clinics attempting to enter Healthia’s acquisition pipeline each month and a strengthened balance sheet, the Company is well positioned to secure maximum shareholder value from clinics they identify with the highest potential.
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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