The Sonic Healthcare Limited (ASX: SHL) share price has failed to fire up this morning after the company announced a new acquisition.
At the time of writing, the medical diagnostics company's shares are see-sawing around yesterday closing price, down 0.02% to $36.68.
Let's take a closer look at today's news.
Sonic Healthcare to strengthen its imaging division
In its release, Sonic Healthcare advised it has signed a binding agreement to acquire 100% of Canberra Imaging Group (CIG).
The company described this move as a "significant and positive step" in developing its imaging division in Australia.
CIG is a leading practice in Canberra, with additional branches located in regional New South Wales. The practice employs 15 radiologists and along with ~200 other staff.
CIG generates annual revenues of ~A$60 million, which is expected to increase the revenue of Sonic Healthcare's imaging division by about 10%.
Today's statement did not specify the cost of the acquisition, but noted the settlement was expected to be complete in the first quarter of FY22. The acquisition will be funded from cash and/or available debt lines.
Sonic Healthcare said CIG would be immediately earnings per share accretive, with the return on capital invested expected to exceed the cost of capital in the first year.
What did management say?
Sonic Healthcare CEO Dr Colin Goldschmidt said:
Canberra Imaging Group is a high quality imaging practice, with outstanding radiologists, management and staff, and with a culture that is strongly aligned with Sonic's Medical Leadership model.
CIG has a proven track record in the greater Canberra market, with a history of strong organic growth based on personalised and excellent customer service. I am delighted to welcome warmly all CIG staff to the Sonic Healthcare group.
Sonic Healthcare share price eyes record all-time highs
The Sonic Healthcare share price has had a solid performance so far this year. The company's shares are up 11.32% to $36.60, not far off their August 2020 record all-time high of $38.00.
The bullish performance of Sonic Healthcare shares is underpinned by a solid financial performance. The company's February half-year results revealed a 33% increase in revenue to $4.4 billion and 168% surge in net profit to $678 million.
The company said that its COVID-19 testing activities had made a significant contribution to its revenue and earnings growth.
