In a transaction that will substantially accelerate strategy and scale, according to UBS, Ebos Group has announced the acquisition of LifeHealthcare for $1.2bn. The broker upgrades its rating to Outperform from Neutral and hikes its target price to $41 from $31.
LifeHealthcare is one of the largest independent distributors of third party medical devices, consumables and capital equipment in Australia and New Zealand, explains the analyst. The company also manufactures allograft material.
There will be a $642m share placement, a $100m retail offer and the balance will be raised by new term loan debt facilities. Credit Suisse estimates the acquisition will be 11% EPS accretive in FY23/24.
Sector: Health Care Equipment & Services.
Target price is $41.00.Current Price is $34.70. Difference: $6.30 – (brackets indicate current price is over target). If EBO meets the Credit Suisse target it will return approximately 15% (excluding dividends, fees and charges – negative figures indicate an expected loss).
