Australia's largest pathology company has today announced its second German acquisition this month, with binding agreements signed to purchase Medical Laboratories Duesseldorf (MLD) for €180 million ($297.6 million).
The news follows Sonic Healthcare's (ASX: SHL) deal struck three weeks ago to buy the Diagnosticum group of laboratories in Dresden for €190 million ($314.2 million), adding to a German network that already includes 60 labs and generated more than $2 billion in revenue in FY22.
Both acquisitions will be paid from cash and existing debt facilities with expected completion before the end of 2023, and Sonic Healthcare expects most of each purchase price to be tax deductible in Germany over 15 years as goodwill amortisation.
The acquisition of one of the leading clinical laboratories in Duesseldorf - the capital of Germany´s most populous state of North-Rhine Westphalia - is expected to bring in revenues of €50 million ($82.7 million) in FY2024, compared to around €65 million ($99.3 million) from Diagnosticum.
MLD employs 300 staff including 13 pathologists, operating hub-and-spoke infrastructure around a 24/7 central lab as well as several branch and hospital sites across the Duesseldorf metropolitan region. Diagnosticum employs 25 pathologists and operates 15 laboratories across its regional geography, including several hospital laboratories and an advanced genetics laboratory in Frankfurt.
"Following our recent announcement of the acquisition of the Diagnosticum laboratory group, our partnership with Medical Laboratories Duesseldorf continues our focus on accretive expansion in the German market," says Sonic Healthcare CEO Dr Colin Goldschmidt.
"We warmly welcome the pathologists and staff of MLD into our German and worldwide team of colleagues at Sonic Healthcare and we look forward to working together with this highly reputable and experienced group.
"The combination with MLD in the West of Germany will further enhance our offering to clinicians and their patients in this important region of the country."
The group states that while while both acquisitions mark important strategic steps for Sonic Healthcare Germany, neither is not considered to be material for the broader group.
If both deals go ahead the group will spend roughly $611 million in total.
Last month a network of medical centres connected to Sonic Healthcare reached an agreement 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.
Shares in SHL are down 1.07 per cent to $35.97 per share at 10.44am AEST.
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