LONDON, UK: Marlowe Plc, the leader in business-critical services and software, has entered into a binding agreement to acquire Optima Health Group Limited for £135 million.
Marlowe also announced a proposed placing to raise gross proceeds of c.£130 million through the issue of new ordinary shares of 50 pence each to new and existing investors. The net proceeds of the placing will be used to fund the acquisition consideration.
Headquartered in Redditch, UK with operational hubs in Glasgow, Sheffield, London and Taunton, Optima is the UK’s leading provider of technology enabled corporate health and wellbeing solutions.
It aims to empower organisations to bring out the best in their people by actively managing their health and wellbeing, and it supports workplace wellbeing with digitally connected health solutions.
Optima Health Group leverages its proprietary technology and flexible delivery model to foster healthy high performance, underpinned by a robust clinical governance framework. Optima has c. 1000 employees, of which c. 600 are clinical professionals.
Optima Health Group is part of a £1 billion UK Occupational Health market, which is growing at 4-5% per annum. Increasing corporate and societal focus on employee health and wellbeing is driving the structural growth in this market, as are trends towards outsourcing and digitalisation.
Optima helps its customers stay compliant with health & safety regulations and saves costs by improving employee wellbeing and productivity and reducing absence. The economic cost of absence and presenteeism is estimated to be £90 billion per annum in the UK.
The acquisition will increase the Group’s run rate revenues and adjusted EBITDA (pre-synergies) to c.£400 million and c.£71 million respectively, with an adjusted Divisional EBITDA margin of c.19%.
The acquisition will also increase Marlowe’s GRC division run rate revenues and adjusted EBITDA (pre-synergies) by 74% and 38%, to c.£157 million and c.£40 million respectively – representing c.40% of Group revenues and c.56% of Group EBITDA on a run-rate basis.
In addition, the Group expects to generate significant cost and revenue synergies through the combination of Optima with its existing Occupational Health division, including cost savings on property, back-office, IT and other duplicated costs.
These are expected to be at least £2 million in the 12 months post completion. Marlowe has a well-rehearsed process for integration in its Occupational Health business with a dedicated integration team who have a successful track record of integrating bolt-on acquisitions.
In the year to 31 December 2020, Optima generated revenues of £56.4 million and adjusted EBITDA of £4.8 million. As at 30 September 2021, on a last twelve months basis, Optima generated revenues of £66.3 million and adjusted EBITDA of £9.4 million and had net assets of £22.0 million, excluding private equity loan notes. For the year ended 31 December 2021, Optima is expected to generate £67.9 million of revenue and a pro-forma adjusted EBITDA of £10.7 million.
The acquisition is conditional on, inter alia, admission of the Placing Shares to trading on AIM. The Acquisition consideration of £135 million, of which £6 million is proposed to be re-invested by Optima senior management into a future Group occupational health business incentive scheme, is payable in cash on completion and shall be funded from the net proceeds of the Placing and the Group’s existing cash resources.
Alex Dacre, Chief Executive of Marlowe plc, said: “The acquisition of Optima significantly strengthens our Governance, Risk and Compliance division and builds further confidence in the delivery of our FY 2024 strategy, which is materially ahead of schedule. Optima provides technology-enabled occupational health services, assuring the health and wellbeing of employees and aligning companies to regulatory requirements.
The combination of Optima with our existing GRC businesses is highly complementary and will enable us to offer customers a broader range of services whilst delivering synergies. The proposed fundraising, alongside an intended refinancing of our existing bank facilities, will enable us to deliver on our strategy at pace with significant capacity for further acquisition-led growth.”