Sonic Healthcare Limited (ASX: SHL; ADR: SKHHY) has announced the acquisition of LADR – Laboratory Group Dr. Kramer & Colleagues (LADR), one of Germany’s Top 5 medical laboratory groups, in a deal valued at €423 million (approximately A$610 million).
Transaction Details:
- Enterprise Value: €423 million (A$610 million), with €222 million in Sonic shares and the remainder in cash, funded from Sonic’s existing cash reserves and debt facilities.
- Expected Financial Impact:
- Earnings per share (EPS) accretion expected immediately, with high single-digit percentage accretion within three years (including synergies).
- Return on invested capital (ROIC) is anticipated to exceed 11% p.a. after 3 years once synergies are realized.
Strategic Synergies:
The acquisition is expected to generate significant synergies across:
- Procurement
- Laboratory operations (including overlaps, specialized testing, logistics, and maintenance)
- Supply and distribution of medical consumables
These synergies are expected to reach full potential within three years post-settlement.
LADR Overview:
- Founded in 1945, LADR is a family-owned business now in its third generation, employing over 2,800 staff.
- LADR operates a network of stand-alone and hospital-based laboratories throughout Germany, with a central laboratory in Geesthacht, near Hamburg.
- LADR also has international operations in Poland and a joint-venture in Finland.
- Revenue: In 2024, LADR’s revenues are expected to be ~€370 million (~A$610 million), with EBITDA of ~€50 million (~A$82 million).
Further Acquisition Potential:
As part of the acquisition, Sonic inherits a 15% interest in a separate German medical laboratory business with annual revenues of ~€25 million. Sonic has the option to acquire the remaining 85% by CY 2027 for an estimated €55 million.
Leadership:
- Key leadership figures from LADR, including Prof. Jan Kramer (CEO), Dr. Tobias Kramer (Medical Director – Infection Prevention and Control), and Mr. Thomas Wolff (CFO), will remain with the company post-acquisition, ensuring a smooth integration process.
CEO Statement:
Dr. Colin Goldschmidt, CEO of Sonic Healthcare, expressed enthusiasm for the acquisition, highlighting the cultural alignment between the companies and the potential to enhance the service offering to clinicians and patients, along with operational efficiencies.
Transaction Timeline:
- The transaction is subject to customary closing conditions, including antitrust clearance, and is expected to close in H1, CY 2025.
This acquisition strengthens Sonic’s presence in the European market and enhances its capabilities in the global healthcare sector.
