Today, 1300 Smiles Limited (ASX: ONT) announced that it has entered into an agreement to acquire a dental practice in Buderim, Queensland.
Buderim is located on the Sunshine coast, 95 kilometres north of Brisbane with a population of around 29,000. The practice provides the full range of dental services including cosmetic and orthodontic.
Management were keen to point out that the acquisition adds to a geographic corridor and hub, creating scale and scope for growth by leveraging local marketing and operational support, which is integral and core to the operations and business model.
1300 Smiles managing director, Dr Daryl Holmes, said "The acquisition is a great fit for 1300 Smiles and we are confident it will contribute to solid returns for shareholders. Following completion, we look forward to welcoming the very experienced dentists and staff to the 1300 Smiles group."
The acquisition will be funded from cash and it was completed on 14 March 2018 according to the release.
The company's new acquisition will fit well with the other local regional acquisitions in Maleny, Gladstone, Roma and Ingham.
Management said this acquisition is not financially material. However, it fits in well with the company's strategy.
1300 Smiles has a number of different drivers to boost revenue and profit. It aims to attract more dentists to existing facilities and expand the facilities which are already at full capacity. It will assist current dentists to increase their turnover and income through benchmarking, training and mentoring.
It will continue establishing new practices in existing and new regions. It will acquire sizeable existing practices at good prices and finally the company can increase its earnings by managing dental facilities owned by others.
Foolish takeaway
This seems like a typical acquisition for 1300 Smiles and fits right into the current portfolio. I think 1300 Smiles is a good quality, growing business that would fit most portfolios well. I think it would be a pretty good buy at today's price.
