AUCKLAND: EBOS Group Limited has entered into a share purchase agreement to acquire LifeHealthcare from Funds advised by Pacific Equity Partners and other minority holders.
The deal comprises of 100% of LifeHealthcare’s Australian & New Zealand subsidiaries and 51% of LifeHealthcare’s Asian subsidiary, Transmedic, for total consideration of approximately A$1,167 million (representing an enterprise value of approximately A$1,275 million on a 100% basis) subject to customary purchase price adjustment.
The acquisition will be fully funded through a combination of the proceeds of a non-underwritten retail offer to eligible existing shareholders to raise up to A$100 million, with the ability to accept oversubscriptions at EBOS’ discretion, approximately A$642 million raised from the placement, a new A$540 million term loan debt facility and approximately 0.7 million new EBOS shares issued to LifeHealthcare management (approximately $23 million ).
LifeHealthcare is one of the largest independent distributors of third party medical devices, consumables, capital equipment, and inhouse manufactured allograft material in Australia, New Zealand and South East Asia.
LifeHealthcare comprises two primary divisions: Australia and New Zealand (ANZ) Distribution & Allografts and Asia Distribution.
For the 12 months ended 30 June 2021, LifeHealthcare generated A$326 million in pro forma revenue and A$92 million in pro forma EBITDA.
EBOS anticipates LifeHealthcare will generate between A$110 million – A$114 million EBITDA in calendar year 2022.
EBOS CEO, John Cullity, said, “The acquisition of LifeHealthcare represents an important step in EBOS’ medical devices strategy, providing greater exposure to this high growth sector as well as providing a measured entry into South East Asia.”
“The enlarged medical devices business will remain part of EBOS’ existing Institutional Healthcare division, which will represent approximately 38% of EBOS’ gross operating revenue.
After entering the medical devices distribution sector in 2019, EBOS has grown its medical devices offering and post-Acquisition, we will have created a division generating approximately A$420 million in pro forma annualised revenue.”
“The Acquisition aligns with our strategy to build a medical devices platform, and provides an opportunity for future growth across existing and adjacent therapeutic areas.”
“We are excited to welcome the LifeHealthcare management team and employees to EBOS and look forward to continuing the strong growth they have achieved to date.”
In commenting on the acquisition EBOS Chair Liz Coutts said, “The continued success of EBOS is underpinned by our adherence to a disciplined strategy that includes investing for growth and expanding and diversifying our earnings.
The acquisition of LifeHealthcare is consistent with this strategy and part of our overall objective to deliver value for our shareholders”.
The Acquisition is subject to closing conditions including obtaining warranty & indemnity insurance, certain OEM and key counterparty consents in relation to change of control of LifeHealthcare, as well as regulatory approvals from FIRB and NZCC and the finalisation of certain restructuring steps in respect of Transmedic, and is expected to complete before the end of FY22.
EBOS also has a termination right if a material adverse effect occurs prior to closing.