Volpara Health Technologies has completed a strategic acquisition of CRA Health, a Boston based breast cancer risk assessment company.
The cost is US$22m (US$18m up front and US$4m in earn-out) and the multiple paid was 5.5 times annual recurring revenue (ARR), which is attractive in Morgans view. The acquisition is being funded from existing cash reserves.
The broker believes the acquisition continues to broaden the company’s reach, with now around 30% (was 27%) of women having a mammogram in the US using one or more of the company’s products.
The add rating is maintained and the target price is increased to $1.92 from $1.70.
Sector: Health Care Equipment & Services.
Target price is $1.92.Current Price is $1.54. Difference: $0.38 – (brackets indicate current price is over target). If VHT meets the Morgans target it will return approximately 20% (excluding dividends, fees and charges – negative figures indicate an expected loss).
