Apiam Animal Health Ltd (ASX:AHX) has acquired the business assets of Golden Plains Group for a total consideration of $2.1 million.
The company considers the acquisition as an important step in its regional expansion strategy to capture market share in the fast-growth Greater Geelong region in Victoria and surrounding areas.
Pursuant to the acquisition, Golden Plains Group clinics will be re-branded under Apiam’s ‘Fur Life Vet’ branding.
Demand for veterinary care continues to accelerate
Apiam managing director Dr Chris Richards said: “The acquisition of Golden Plains Group represents an important milestone in expanding our market presence across the Greater Geelong and Ballarat area.
“We have recently opened two new greenfield clinics at Torquay North and Highton, with both clinics performing extremely well since the commencement of trade.
“Demand for veterinary care throughout the area continues to accelerate rapidly and we see it as a significant market opportunity for Apiam in FY22.”
Acquisition rationale
Golden Plains Group is comprised of two high-performance veterinary clinics being Golden Plains Animal Hospital in Bannockburn and Smythesdale Animal Hospital near Ballarat.
Bannockburn is 20 kilometres from Geelong and is one of Victoria’s fastest-growing regional towns, becoming a satellite location for many workers from Geelong.
These clinics, which provide veterinary services across the full range of companion and livestock animals and employ 7 veterinarians, is expected to generate about $2.85 million in revenue on an FY21 proforma basis.
Richards added: “These locations are currently among the fastest-growing regions in Victoria, and we see significant opportunity to capture market share and consolidate our existing operations, allowing us to achieve efficiencies and resourcing benefits.”
Acquisition terms
Apiam plans to fund the acquisition through a cash payment of $2.1 million from its cash reserves.
The settlement of the Golden Plains Animal Hospital occurred on August 3, 2021, while that of Smythesdale Animal Hospital is expected to happen by the end of August 2021.