Ebos still hungry for acquisitions after $1.1 bln Symbion deal, Waller says
Ebos Group, which completed its biggest ever deal buying Australia's Symbion for $1.1 billion this year, is still hungry for acquisitions and has two potential targets, says chief executive Mark Waller.
The Christchurch-based healthcare and pet products distributor paid $367 million in cash, tapping new and existing shareholders, and $498 million in scrip, while taking on $230 million in net debt to buy Zuellig Group's Symbion unit in a deal that lifted the Hong Kong-based investor's stake in Ebos to 40 percent.
The company had $198 million of cash on its balance sheet as at June 30, its annual accounts show, and Waller said the company has "plenty of headroom at the moment" to make new investments.
"We have a couple of other acquisition opportunities we're starting to evaluate," Waller told BusinessDesk. They are "not massive." One is in healthcare and one in pet care, he said.
Ebos looks for businesses "based around our core competencies" and builds out existing relationships, he said. For example companies with healthcare businesses such as Bayer and Novartis also had animal health divisions. And veterinarian clinics had similarities to pharmacies.
The company yesterday posted a 5.5 percent gain in annual profit, meeting its prospectus forecast. Sales rose 28 percent to $1.82 billion.
The latest year included a full 12 month contribution from Masterpet, acquired in December 2011 for $105 million plus debt in a deal that gave Ebos a suite of brands including Procter & Gamble pet care, Eukanuba and IAMS pet food, and the Vitapet grocery brand.
It added Zuellig's Australian pharmaceutical wholesaler and distributor, Symbion, this year in a deal that will more than triple annual revenues and make it a major player across Australasia.
Healthcare generated sales of $1.65 billion in the latest year, up from $1.3 billion a year earlier, while profit edged up to $30.9 million from $26 million. Animal care sales rose to $169.5 million from $86.3 million in its first full year, lifting earnings to $12.6 million from $8.9 million.
Waller said the other big achievement in the latest year was to be nominated as the preferred bidder for Health Benefits Ltd, the Crown agency responsible for procurement and supply chain management for the 20 district health boards in what would be a 10 to 15 year deal.
"It's a bloody big deal that vindicates our position as market leader," Waller told BusinessDesk.
Ebos shares were unchanged at $9.70 yesterday and have climbed 34 percent this year. The stock is rated a 'buy' based on the consensus of two analysts polled by Reuters.