Healthia (ASX:HLA) to pay $43M for The Optical Company plus pursue $15.3M equity raise

• Australian health operator Healthia (HLA) entered a trading halt just before posting a $43 million acquisition and $15.3 million equity raising
• Healthia will acquire The Optical Company (TOC) which is a leading optometry business that owns and operates 41 stores across Australia
• Both companies believe this will lead to significant growth in the $3.8 billion Australian optometry industry
• The buy includes a $31.1 million cash consideration, 9.4 million Healthia shares and a deferred consideration of $3 million
• Healthia will raise up to $15.3 million through an institutional and retail entitlement offer which will issue around 16.1 million new shares at 95 cents
• The addition of TOC will increase Healthia’s addressable market revenue from $6.5 billion to $9.8 billion
• Healthia remains in a trading halt with shares last trading for $1.03 on Thursday, October 29

Healthia (HLA) is set to acquire Australian optometry business, The Optical Company (TOC), for a cash and debt-free purchase price of $43 million.

Healthia entered a trading halt earlier this morning ahead of the acquisition announcement and a subsequent equity raising to fund the deal.

The Acquisition

The acquisition is expected to strengthen Healthia’s position as a leading allied health operator in Australia.

TOC owns and operates 41 stores across Australia. In addition, it owns and operates eyewear frame distributor, Australian Eyewear Distributors (AED).

“We are excited to partner with Healthia. We believe there is a strong alignment
between our respective businesses and that there exists a significant opportunity to continue our organic and acquisitive growth,” TOC Founder and CEO Colin Kangisser said.

“TOC also provides Healthia with the expertise, people, platforms and systems required for continued organic and acquisitive growth in the optometry industry,” Healthia Managing Director and CEO Wesley Coote said.

The Australian optometry industry revenue is expected to be $3.8 billion and is expected to grow 2.1 per cent each year over the next five years. Therefore, this acquisition increases Healthia’s total addressable revenue market from $6.5 billion to $9.8 billion.

The $43 million purchase price includes an upfront cash consideration of around $31.1 million, the issue of 9.4 million HLA shares (roughly $8.9 million) to the TOC vendors and deferred consideration of $3 million.

The Equity Raising

Healthia will raise up to $15.3 million through an accelerated non-renounceable pro-rata entitlement offer.

The entitlement offer will include a fully underwritten one-for-four institutional entitlement offer to institutional and professional investors, and a one-for-four retail entitlement offer to eligible retail shareholders.

The entitlement offer will issue around 16.1 million new shares at 95 cents per share. The offer price represents an 8.2 per cent discount to the five-day volume-weighted average price of $1.035.

The remaining acquisition price will be funded from other sources. A total of $15 million will be allocated from an existing finance facility with ANZ and the Bank of Queensland, $2.3 million will be funded from Healthia’s cash reserves and 9.4 million Healthis shares will be held in voluntary escrow.

Healthia remains in a trading halt with shares last trading for $1.03 on Thursday, October 29.