Healthia shares halted on $15m cap raise and acquisition spree

This small-cap healthcare share is continuing its acquisitive streak.

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Key points

  • Healthia shares are stuck in a trading halt today
  • The company is undertaking a $15 million capital raising
  • Healthia has announced its first three acquisitions for FY23

The Healthia Ltd (ASX: HLA) share price isn't going anywhere this morning as shares have been placed in a trading halt.

The ASX healthcare share has announced a $15 million capital raising to fund acquisition opportunities and provide additional financial flexibility.

Healthia taps the market

Healthia intends to raise up to $10 million from institutional shareholders and up to $5 million from retail shareholders.

The institutional component is partially underwritten by Canaccord.

Retail shareholders will be entitled to subscribe for one new share for every 12.5 Healthia shares they hold at 7pm on Monday, 12 September.

New shares are being offered at an issue price of $1.47, representing a 3.3% discount from the last Healthia closing price of $1.52.

The capital raising will result in roughly 10.3 million new Healthia shares being issued, equating to around 8% of the company's current share count.

Following the capital raising and on a pro forma basis as of 30 June 2022, Healthia would have total liquidity of roughly $36.2 million.

Acquisitions ahoy

Healthia was extremely busy on the M&A front in FY22, spending $111.3 million on acquisitions to increase its portfolio from 212 to 307 businesses.

This acquisitive streak is set to continue.

In today's announcement, the company noted it has a large active pipeline of potential allied health acquisition opportunities. It's reviewing more than 110 allied health businesses as potential targets.

As a result, it is confident in being able to deploy at least $20 million to acquisitions in FY23.

To kick things off, Healthia has entered into three separate binding agreements to acquire 12 physiotherapy clinics.

It will be acquiring Watsonia Physiotherapy, a single clinic operating in Victoria.

Corio Bay Health Group will also join the fold. Its nine allied health businesses in Victoria will soon fall under the Healthia banner.

Finally, as already announced in June, the company will also acquire Sunshine Coast Hand Therapy, which comprises two clinics.

Healthia anticipates paying $8.29 million of total consideration for these acquisitions. This will comprise upfront cash of $6.61 million and the issuance of clinic class shares worth $1.68 million.

The company expects these acquisitions to contribute annualised revenue of $8.88 million and annualised EBITDA of $1.87 million.

Healthia also expects these acquisitions will be immediately earnings accretive. 

What's more, any earnings from acquisitions settled in FY23 will be in addition to the $40 million EBITDA guidance.

Healthia share price snapshot

The Healthia share price has tumbled 34% in the year to date. Over the last 12 months, Healthia shares are printing a 20% fall.

Healthia currently has a market capitalisation of $195 million.

The company requested today's trading halt until it makes an announcement regarding the outcome of the institutional component of the capital raising. 

At the latest, Healthia shares will resume trading on Monday.

Motley Fool contributor Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended HEALTHIA FPO. The Motley Fool Australia has recommended HEALTHIA FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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