Sonic Healthcare affiliate in bid to acquire Vita Group

A network of medical centres connected to Sonic Healthcare (ASX: SHL) has struck a deal worth up to $22.3 million to acquire Vita Group (ASX: VTG), the loss-making owner of skin health and wellness brands including Artisan Aesthetic Clinics.

Vita Group was significantly downsized after Telstra (ASX: TLS) pulled out of a partnership for it to run retail stores on behalf of the nation's leading telco, leading to the $110 million sale of its traditional core business. Since then the company has been coming to grips with its new identity as a laser clinic operator, posting a $6.4 million EBITDA loss in the recent December half.

With net assets of close to $30 million at the end of 2022 including around $16.8 million in cash, the company has caught the eye of a suitor in the form of Practice Management Pty Ltd, with which it has reached a scheme of implementation agreement (SID) of more than 6.25cps.

However, with Vita Group committed to pay a dividend to shareholders of a similar amount as well, the total value for shareholders from the deal could be as much as 12.68cps or an equity value of $22.3 million.

This represents a 58 per cent premium to Vita Group's closing share price yesterday, and shares have actually shot up by more than that to 13.7cps at the time of writing. 

Vita Group's board unanimously recommends shareholders vote in favour of the scheme at a meeting due to take place in June.

"After due consideration, the Vita Group board has unanimously determined that the Scheme is in the best interest of Vita Group shareholders," says non-executive chair Paul Mirabelle.

"In arriving at this conclusion, the board, including independent directors, considered multiple factors including a view on the intrinsic value of the Artisan business keeping in mind the early stage of the business," he says.

"We believe the outcome is positive for shareholders and other stakeholders including our customers, employees, executives and suppliers in the current circumstances."

Information about Practice Management Pty Ltd is scant in Vita Group's press release and several executives from the company did not respond to requests for comment, but documents from the Australian Securities and Investments Commission (ASIC) reveal the bidder shares the same office address as Sonic Healthcare.

The potential acquirer's only two directors, Colin Goldschmidt and Christopher Wilks, are CEO and director respectively at Sonic Healthcare.

Practice Management was previously known as IPN Practice Management until a decision was made for a name change in December 2022. Another company still exists under the name IPN Medical Centres Pty Ltd, which also has Goldschmidt and Wilks among its directors, and with an ASIC record that explicitly states its ultimate holding company is Sonic Healthcare.

On its website, IPN Medical Centres states that it works with doctors, nurses and practice staff at more than 160 medical centres, providing 10 million-plus patient consultations a year supported by a network of more than 1,900 doctors.

It is not clear whether there is an ongoing link between IPN Medical Centres and the renamed Practice Management, and representatives at IPN were unable to provide clarification prior to publication.