The Healius Ltd (ASX: HLS) share price is edging higher today after the company announced the successful completion of its medical centres business.
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The Healius Ltd (ASX: HLS) share price edged higher today. This comes after the company announced the successful completion of its medical centres business. At the time of writing, the Healius share price is up 0.5% to $3.55.
Completion of sale
According to the release, BGH Capital has acquired Healius’ medical centres business, Healius Primary Care. The deal includes 69 medical centres, 13 medical practices and 62 dental clinics.
Healius received cash proceeds of $483 million. This represents $500 million as enterprise value when adjusted for future earn-outs, movements in working capital, separation and completion costs. Furthermore, a deferred consideration of $75 million for the dental business was received due to its strong trading following COVID-19.
The company advised it will continue to operate its existing pathology collection centres and imaging clinics. These are located within the medical centres under long-term leases at market rates. In addition, Healius will provide its sold-off business certain services on commercial terms for roughly 12 months.
Healius noted that the proceeds of the sale will be used to strengthen its balance sheet and support growth initiatives in its pathology and imaging and its day hospitals businesses. The company stated that it’s on track to streamline its portfolio through corporate cost base initiatives.
What did management say?
Healius managing director and CEO, Mr Malcolm Parmenter, commented on the sale, saying:
This transaction simplifies our portfolio and allows us to focus on our market leading diagnostics and day hospital businesses, delivering on our mission of sustaining life-enhancing healthcare through people who care. It is a positive step for Healius, strengthening the company, reducing our net debt and freeing up capital for investment.
Backed by the financial strength and expertise of BGH Capital, I am confident that the business will thrive as a standalone entity, expanding its critical role in frontline care in Australia.
How has the Healius share price performed?
The Healius share price has been has been a solid performer since COVID-19 hit the Australian healthcare sector. Shares in the company sank to as low as $1.92 in March and have steadily been gaining traction. Reaching its 52-week high last month of $3.85, the Healius share price fell just short of its 5-year record of $4.04 achieved in 2017.
Investors look to be remaining bullish on Healius shares, with the company’s share price rising more than 51% in the last 3 months alone.
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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.