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Healthcare M&A-01 (1)

EBOS’s A$1.167bn LifeHealthcare acquisition a sign of healthy medtech sector

  • EBOS acquisition of LifeHealthcare to round out a busy year for the health sector.
  • Over the past 5 years the S&P/ASX 200 healthcare index has increased by 124%.
  • There have been an average of 88 deals in Aussie healthcare space over the past 3 years.

EBOS Group’s (NZE:EBO) A$1.167 billion acquisition of Pacific Equity Partners (PEP) owned LifeHealthcare is rounding out a hectic year for medtech deals and mergers and acquisitions (M&A) across the board.

Today (9 December) Australasian health care group EBOS acquired medical devices business LifeHealthcare and is asking shareholders to put their hands in their pockets to raise A$742 million to help fund it.

EBOS will buy LifeHealthcare from Australian private equity firm PEP in a transaction valuing the target at 11.5x forecast EBITDA.

According to a company document, for the 12 months ended 30 June 2021, LifeHealthcare generated A$326 million in pro forma revenue and A$92 million in pro forma EBITDA. 

Once inked, the deal will see EBOS enter the surgical parts business, with LifeHealthcare supplying device implants for spinal and orthopaedic surgery and associated equipment used in theatres.

It’s a sign of a robust healthcare services and facilities sector, which is being transformed by digitisation and other macro factors.

According to BDO’s Healthcare M&A Highlights, which provides a targeted snapshot of M&A activity in the Asia-Pacific region, over the past five years the S&P/ASX 200 healthcare index has increased by 124% compared with 39% growth for the S&P/ASX 200, the BDO report found.

With global giants like Microsoft Corporation (NASDAQ: MSFT), which continues to be a leading name across almost every industry, heavily investing in its healthcare offerings with the likes of its Microsoft Cloud for Healthcare platform, technology is revolutionising the sector and attracting interest from a range of players.

BDO’s Healthcare M&A Highlights, which has a detailed focus on Australia, found that amid a busy time for dealmaking in 2021, M&A activity remains focused on healthcare services and facilities as both sub-sectors continue to consolidate.

There has been strong M&A activity over the past three years within the Australian healthcare space, averaging more than 88 deals per year. This trend has been driven by many well-resourced and educated buyers, including trade players and private equity (PE), the report noted.

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