This new share could be one to watch with its acquisition strategy

Healthia Ltd (ASX:HLA) has plans to go on an acquisition spree.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

There are few shares to have come onto the ASX over the last few months with as much likely growth potential as Healthia Ltd (ASX: HLA) due to its acquisition strategy.

Healthia is a healthcare business, it's Australasia's leading podiatry group with 56 podiatry clinics and shoe stores. It also provides physiotherapy services and manufactures custom-made & 3D printed foot orthotic devices for podiatrists.

The business contains the former chief financial officer (CFO) and founder & CEO of Greencross Limited (ASX: GXL).

Today, Healthia announced the acquisition of a physiotherapy clinic in Cairns and has also entered into an agreement to acquire a physiotherapy clinic on the Gold Coast.

Together, the two clinics are expected to contribute annualised revenue of $2.7 million and annualised earnings before interest, tax, depreciation and amortisation (EBITDA) of $0.425 million.

The cost for the two acquisitions will be $1.45 million of cash and $0.36 million of non-voting shares, meaning the total consideration is $1.8 million. This seems like a reasonable price for amount of EBITDA it will bring.

After the acquisitions are settled it will bring the total number of physiotherapy clinics under Healthia's control to 26.

Tony Ganter, the CEO of the Physiotherapy division, said "The acquisition of these two clinics further strengthens our position in the Queensland market and are complementary to our existing physiotherapy clinic network.

Healthia also announced that it has invested in another HP Multi Jet Fusion 3D printer to increase its production capacity of orthotic devices from 40,000 pairs to 60,000 pairs per year. A 50% increase in production capacity is a sizeable upgrade.

Foolish takeaway

Healthia shares are up 1.3% in response to this news, however it's still down 6% over the past month.

A roll-up strategy isn't the most compelling investment case, but it could work well in the shorter-term as it increases its number of clinics. It could be one to watch for people interested in small caps.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Greencross Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

A smiling businessman in the city looks at his phone and punches the air in celebration of good news.
Broker Notes

These ASX 200 shares could rise 50% to 60%

Brokers believe these shares could deliver big returns for investors.

Read more »

A girl is handed an oversized ice cream cone with lots of different flavours.
Best Shares

8 ASX All Ords shares that tripled in value in FY25

Just 8 out of the 500 companies making up the ASX All Ords achieved share price growth of 200% or…

Read more »

Broker written in white with a man drawing a yellow underline.
Broker Notes

Brokers name 3 ASX shares to buy today

Here's why brokers are feeling bullish about these three shares this week.

Read more »

Woman with a scared look has hands on her face.
Broker Notes

Bapcor shares fell more than 30% yesterday. Should investors buy in the dip?

Is this a value opportunity?

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Broker Notes

Broker raises price targets on 2 ASX 200 shares to buy

Ord Minnett has just upped its 12-month share price targets on 2 buy-rated ASX 200 stocks.

Read more »

Man with rocket wings which have flames coming out of them.
Share Gainers

Guess which ASX All Ords stock just rocketed 34% on strong earnings growth

Investors just sent this ASX All Ords stock surging 34%. Here’s what’s happening.

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why DroneShield, Gentrack, Metals X, and Northern Star shares are tumbling today

These shares are ending the week in the red. But why?

Read more »

A businessman looking at his digital tablet or strategy planning in hotel conference lobby. He is happy at achieving financial goals.
Share Gainers

Why Dimerix, Newmont, Regal Partners, and Titomic shares are storming higher

These shares are having a good finish to the week. Let's see why.

Read more »