9 Dec 2021

EBOS Group to buy medical equipment distributor in billion dollar deal

11:41 am on 9 December 2021

Diversified healthcare, medical and pharmaceutical products distributor EBOS Group has made a deal to buy medical equipment distributor LifeHealthcare for more than a billion dollars.

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Photo: 123rf/ Hin255

The company will pay about A$1.17 billion ($NZ1.23b) for LifeHealthcare's Australian and New Zealand subsidiaries and 51 percent of its Asian subsidiary, Transmedic, with a pathway to buy the balance of Transmedic in the medium term.

"The acquisition of LifeHealthcare represents an important step in EBOS's medical devices strategy, providing greater exposure to this high growth sector as well as providing a measured entry into South East Asia," EBOS chief executive John Cullity said.

"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."

The company planned to fund the purchase of LifeHealthcare with a A$100-million ($NZ105m) retail share offer to shareholders, as well as an underwritten placement of A$642m ($NZ676m) of shares, a debt facility of A$540m ($NZ568m) and about 700,000 new shares, valued around $23m, issued to LifeHealthcare management.

EBOS also provided a trading update, pointing to a strong start to the financial year, with a near 11 percent increase in group revenue over the first four months and a 14 percent increase in net profit.

"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$420m ($NZ442m) in pro forma annualised revenue," Cullity said.

LifeHealthcare was expected to generate an underlying profit of between A$110m to A$114m ($NZ115-120m) in the next calendar year.