Ebos to buy Australia's HPS for $A154m, expanding pharmacy footprint

The acquisition is expected to increase Ebos's underlying ebitda by at least 5% in the 2018 financial year.

Ebos Group, the pharmaceutical and animal health products maker, has entered a binding agreement to acquire HPS, Australia's largest provider of outsourced pharmacy services to hospitals, for A$154 million.

The acquisition is expected to increase Ebos's underlying earnings before interest, tax, depreciation and amortisation by at least 5 percent in the 2018 financial year and will add to earnings per share from year one, it said in a statement to the New Zealand stock exchange. In the first half of the 2017 financial year, Ebos reported ebitda of $119.9 million. The acquisition will be fully debt financed. As at Dec. 31, Ebos's bank debt was $463.7 million.

The deal complements and extends Ebos's existing Australian hospital business and provides a new platform for expansion, Christchurch-based Ebos said. HPS has contracts with private hospital groups, correctional facilities, oncology and fertility clinics and services more than 100 sites and employs some 580 staff including 200 pharmacists.

"By virtue of this acquisition, Ebos will be the leading provider of outsourced pharmacy services in the Australian hospital sector," said Ebos chief executive Patrick Davies.

The key management of HPS will continue to operate the business under Ebos's ownership and will form part of the group's institutional healthcare business division. The deal, subject to certain conditions, is expected to be completed no later than June 30.

Ebos transformed itself in 2013 with the purchase of Australian pharmaceutical wholesaler and distributor Symbion, and has since bought New Zealand vitamin and herbal tea maker Red Seal, pharmaceuticals firm Zest, Australian pharmacy retailer Good Price Pharmacy Warehouse, the BlackHawk Premium Pet Care pet food business, and more recently merged its Australian Chemmart pharmacy chain with rival Terry White Group.

The stock advanced 0.4 percent to $18.02 and is up 17 percent over the past 12 months.


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