You may not have come across Ebos Group (ASX: EBO) on your hunt for healthcare bargains. That's because the New Zealand-based company has only just lodged its application to list on the ASX (ASX: ASX), but if accepted it will be one to watch given its solid growth profile and consistent earnings.
Ebos group is the largest (and most diversified) Australasian wholesaler and distributer of healthcare, medical and pharmaceutical products by revenue after completing a recent acquisition of distribution company Symbion.
The purchase pits the Ebos against key competitors Sigma Pharmaceuticals (ASX: SIP) and Australian Pharmaceuticals Industries (ASX: API), but it is the market leader with around 32% market share.
Not only is Ebos a market leader, but the company has a long history of successful growth to the benefit of shareholders. Over the last 10 years Ebos has achieved compounded annual returns of 19% through a combination of successful acquisitions and organic growth. The Symbion acquisition has been the most important so far and has put Ebos on track to exceed NZ$6 billion in revenues for FY14.
Ebos' listing would add variety to the current list of Australian healthcare companies, many of which are priced for aggressive growth. In New Zealand, Ebos trades at a price to earnings ratio of 15, which feels reasonable given the 19% annual compounded return and the positive long-term outlook.
The distribution industry is relatively low growth and has low barriers to entry, but Ebos has momentum with its program of acquisitions and a strong reputation that is well established.
While Ebos will be a fresh listing to the ASX the company itself is no new upstart. It has roots as far back as 1922 and has been listed in NZ since 1960. With the addition of Symbion, a listing on the ASX is expected to give better visibility and marketing opportunities as well as access to capital for growth going forward.
Foolish Takeaway
The company is the clear standout of the listed healthcare distribution companies and while growth is likely to slow, its solid performance makes it one to watch when it gains approcal to join the ASX.
