1300 Smiles Limited (ASX: ONT) has announced that it has entered into an agreement to acquire an established multi-chair dental practice in Noosa, Queensland.
Noosa is the popular resort town located on the Sunshine coast, 95 kilometres north of Brisbane with a population of more than 50,000 people.
According to the announcement, the deal is expected to be completed "by the end of June/early July 2018 subject to the satisfaction of customary conditions precedent and finalising due diligence".
No details were provided on the purchase price for the acquisition.
1300 SMILES Managing Director, Dr Daryl Holmes, said that "the acquisition reinforces our focus on the Northern Brisbane to Sunshine Coast geographic and economic growth corridor, creating increased scale and scope for 1300SMILES. This exciting acquisition complements our recently opened (21 May 2018) brand new (greenfield) nine chair practice at Morayfield, north of Brisbane, within the massive, fast-growing and expanding 14,000 sqm Morayfield Health Hub facility. The acquisition is a great fit for us, and we expect it will contribute to solid returns for shareholders over the months and years ahead."
The 1300 Smiles share price was up marginally by 1% following the announcement.
Foolish takeaway
The acquisition while not individually material to 1300 Smiles, is a typical acquisition for 1300 Smiles that fits right into the current portfolio. It is part of a broader group strategy to grow by acquiring existing practices.
I like the company's business model which taps into owners of dental practices who are looking to free themselves from the complexities and management hassles of running a dental facility, whilst maintaining ownership and focusing on their core ability.
I think 1300 Smiles is a good quality founder led business and with a dividend yield of 3.8%, it can also add some income to your portfolio.
While 1300 has an attractive yield, if you are looking for income you might want to read this FREE reportabout these ASX companies which are set to raise their dividends.
