SYDNEY: Austco Healthcare Limited (AHC:ASX) has officially announced the signing of a Share Purchase Agreement to acquire Amentco Enterprise Group Ltd., a renowned provider in the industry and a certified reseller of Austco’s Nurse Call systems.

The agreement, which aligns with the terms outlined in the previously announced Term Sheet, positions Austco to take over 100% of Amentco’s shares. This acquisition is set to be finalized around May 1, 2024, provided all conditions precedent are met.

This strategic acquisition is poised to bolster the market presence of both Austco and Amentco, driving growth and delivering greater value to their Australian customer base. Austco plans to integrate Amentco’s extensive operations, which cover numerous sites and include key security solutions customers throughout Queensland.

To ensure a smooth transition, Austco will retain Amentco’s key personnel, aiming for uninterrupted service for customers and staff. The merger is expected to generate significant revenue synergies through the cross-selling of products and services and the optimization of operational processes.

The financial terms of the deal reveal that Amentco will be acquired on a cash-free, debt-free basis for a total purchase price of $10,600,000. This figure is calculated at 3.5 times Amentco’s financial year 2023 EBITDA, with standard adjustments for working capital and any net debt assumed, as well as an earnout provision.

The purchase price breakdown includes:

An upfront cash payment of $5,000,000, subject to adjustments.

The issuance of $2,000,000 worth of Austco shares at an issue price determined by the 30-day volume-weighted average share price two business days before completion.

An earnout amount based on the average EBITDA for FY24 and FY25, multiplied by 3.5, minus the upfront payment.
This acquisition marks a pivotal step for Austco Healthcare as it continues to expand its reach and capabilities within the healthcare and security solutions domain.