Apiam is moving fast to capitalise on a major growth opportunity in south-east Queensland.

Across the Australian veterinary and animal health sector, new market opportunities have emerged to serve rapidly expanding regional growth corridors and ASX-listed Apiam (ASX:AHX) is capitalising on a first-mover advantage to become the dominant player in regional vet services, through a strategy of targeted M&A.

In its latest deal announced this morning, Apiam flagged the acquisition of Scenic Rim Vets — a leading equine and mixed animal veterinary business based in South-East Queensland.

Shares in the company rose by another 4% in morning trade and are up more than 50% for the year, as investors back the AHX executive team’s regional expansion strategy.



Equine services

As part of its operations, Scenic Rim runs a state-of-the-art equine clinic that’s situated in close proximity to a number of large equine studs in South-East Queensland.

Founded in 2003, the company has grown to become one of the largest equine veterinary clinics in the state, and now employs a total of 13 vets with an experienced support team.

Its business focus is on reproduction and surgical services for performance horses, and the veterinary team includes two leading vets with advanced surgical skills.

Strategically, Apiam MD Dr Chris Richards said the Scenic Rim acquisition marks a major addition to the group’s equine services.

As well as its dedicated equine clinic in Beaudesert, Scenic Rim Vets also operate a mixed animal clinic in nearby Boonah.

The new clinic is expected to  deliver synergies with Apiam’s existing vet clinics in Queensland that service the equine industry, and complement its two dedicated equine centres at Gippsland and Warrnambool in Victoria.

It’s also consistent with the group’s strategy to expand its presence in south-east Queensland – a region the Apiam executive has already highlighted as an important growth corridor.

“The Scenic Rim Vets acquisition will add two further strategic sites from which to capture the broader mixed animal market growth in these attractive peri-urban and regional locations,” Apiam said.

It follows on from another M&A deal in May, where Apiam completed the acquisition of three leading veterinary centres in Queensland that are expected to increase group revenues by $10m per year.


Breaking down the numbers

Total consideration to complete the acquisition will be $16m, in line with the valuation multiples for Apiam’s previous deals.

The acquisition will be structured in 90% cash and 10% in Apiam stock, via the issue of 1.72 million Apiam ordinary shares to the vendors.

In addition, the Scenic Rim veterinary group will immediately deliver $6.9m in proforma revenue for the 2021 financial year, and is expected to be earnings accretive in its first full year of ownership, Apiam said.

This article was developed in collaboration with Apiam, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.