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Podiatry roll-up Healthia has launched a $26.8 million initial public offering — and carved off shares for clinicians as part of an incentive plan.

The offer opened yesterday and is priced at $1 a share. While $7.5 million has been set aside for eligible clinicians, it’s another example of an IPO where retail shareholders will likely only get a look-in if they are a client of a participating broker.

The clinician offer is to be as part-payment for the 48 physiotherapy, podiatry and rehab clinics Healthia has binding agreements to buy.

Healthia is following a similar path to newly listed dental roll-up Smiles Inclusive (ASX:SIL) which is trading around its $1 issue price despite a recent hiccup with a prospectus target miss.

But the podiatry play is also issuing a special, non-voting ‘clinic class’ of shares. These are not part of the IPO offer but will be issued to the clinicians working for Healthia.

“A key focus of Healthia is to retain and incentivise its clinicians. Healthia has developed a clinician retention program which… allows our clinicians to have an ownership interest in the Group’s Clinics,” the company’s prospectus says.

The clinic class shares give clinicians a claim to up to 48 per cent of the after-tax profits in the clinic where they work by way of a dividend, as a way to align their interests with those of shareholders.

These shares will also be issued as part-payment for acquired clinics.

At listing, there will be about 1,227 clinic class shares on issue, representing an interest in about 14.4 per cent in the earnings of the group.

Stockhead is seeking comment from lead manager Canaccord Genuity and Healthia.

Consolidating the foot industry

Healthia now owns the 56-strong chain of My FootDr podiatry clinics, an orthotics laboratory called iOrthotics, and half of an allied health supplies business called DBS Medical.

Chairman Glen Richards is hoping a co-owner model will allow Healthia to gain a large scale foothold in the fragmented $3 billion sector, much in the same way as he did with his vet clinic Greencross (ASX:GXH).

Healthia is not a fast-growing business, but it does have solid revenue already.

The company has split its accounts into pro forma — financials that strip out one-off expenses or income that might distort the true nature of a business’s position — and statutory, which includes everything.

In this case the big-ticket items were contributions from acquisitions that took place during fiscal 2018.

The pro forma accounts show revenue ticking up slowly from $66 million in 2016 to $71 million in 2019, and net profit going from $4 million to $5 million in the same period.

Statutory net profit starts at $267,000 in 2016, dips to a loss for two years, then is forecast to rise to $2.3 million by 2019. Revenue rises from $5 million to $66.9 million.

The IPO is set to close on August 23 and the shares are expected to list around September 11.