The Integral Diagnostics Ltd (ASX: IDX) share price is rising higher after it announced an acquisition.
Integral Diagnostics is a provider of medical imaging services. It has over 60 clinics across multiple brands in Australia and New Zealand.
Integral Diagnostics acquires The X-Ray Group
Today the company announced that it is acquiring The X-Ray Group for an upfront value of $37.5 million made up by a combination of cash and shares. A further $1 million will be paid in three years.
Integral Diagnostics said that $25.95 million will make up the cash portion of the payment. The shares portion of the transaction is $11.55 million worth of Integral Diagnostics shares to be issued when the acquisition is completed.
It will fund the transaction with existing debt facilities.
As part of the deal, there is a possibility of an extra $4 million for FY22 and $2.5 million for FY23 to the sellers if The X-Ray Group meets EBITDA performance targets.
Integral Diagnostics said that the deal is subject to “customary conditions” and is expected to be completed in November 2021.
The X-Ray Group and its synergies for Integral Diagnostics
Integral Diagnostics said that The X-Ray Group is complementary to its existing regional footprint. It has potential operational synergies and growth opportunities.
The X-Ray Group is a group of radiology clinics in Albury and Wodonga, along the Victorian and New South Wales border. It also has three smaller community clinics in Wangaratta, Yarrawonga and Lavington.
It has a projected FY22 EBITDA of between $5 million and $5.5 million, before any COVID impacts. Unfortunately, it didn’t specify any details on what the COVID impacts might be.
Final thoughts on the Integral Diagnostics share price
The Integral Diagnostics share price has done well through COVID. It initially dropped sharply in March 2020 but recovered quickly and was back to pre-COVID levels in August 2020.
In reaction to the acquisition the Integral Diagnostics share price is up 3.8% at the time of writing.
I’m not sure if it is a buy at this share price as it is not a company I have put the research into. For investors who are considering if Integral Diagnostics is a buy, I recommend our FREE share valuation course for both newer investors and more experienced investors who want a refresher.
