Sonic Healthcare Limited (ASX: SHL) has increased its ownership interest in German company GLP Systems by 25% to 80%. GLP has developed a cutting-edge laboratory automation technology which is ready for international commercialisation. The technology enables specimen tubes to be automatically transported between storage, work areas and diagnostic machines.
GLP currently has revenue of approximately €13 million with rapid growth expected in future years. Therefore given Sonic generated over $5 billion in revenue in 2016, GLP is unlikely to have a significant impact on group profitability in the near term.
Today's announcement comes on the back of Friday's news that Sonic will acquire Germany-based Staber Laboratory group for €120 million in a deal which is expected to be 3% to 4% earnings accretive.
Sonic generates most of its revenue overseas and provides a range of services including imaging, pathology and clinical solutions. This protects it from regulatory changes in an individual country or those affecting a specific service type. For example, the company was well insulated from recent events impacting other Australian healthcare providers.
In contrast, listed peers Primary Health Care Limited (ASX: PRY), Capitol Health Ltd (ASX: CAJ) and Integral Diagnostics Ltd (ASX: IDX) have no presence abroad. As a pure-play radiology provider, Capitol in particular has struggled in recent times with its share price tumbling almost 90% since April 2015.
With a price-to-earnings ratio (PER) of almost 20 and a 3.5% yield, Sonic looks like a decent investment given it offers diversified exposure to the global healthcare industry and has a 30-year track record of paying increasing dividends.
