Optima Health deal 'materially accelerates' growth plans, says broker

RBC Capital Markets reiterated its 'outperform' standing connected Optima Health PLC (AIM:OPT, OTC:OHLTF, FRA:J3N) and maintained its 240p terms people pursuing Tuesday’s announcement of a £100m acquisition of People Asset Management Healthcare.

The broker said the woody cemented Optima’s presumption arsenic the starring standalone UK occupational wellness provider, with an estimated 15% stock successful a £1.6bn market.

RBC argued that acquiring 1 of the apical 4 outsourced providers removed a cardinal rival and materially accelerated advancement towards Optima’s medium-term targets of £200m revenue, £40m adjusted net earlier interest, tax, depreciation and amortisation, and astir 25% marketplace share.

The £100m information represented astir 12.2 times 2025 adjusted net earlier interest, tax, depreciation and amortisation and would beryllium funded done £70m of existing slope facilities and a £30m interest-free span indebtedness from entities controlled by Optima’s largest shareholder.

An equity unfastened connection of £35m astatine 175p per share, an 18% discount to the pre-announcement price, would refinance the span installation and screen astir £5m of acquisition costs.

RBC expected leverage to emergence to astir 2.7 times nett indebtedness to net earlier interest, tax, depreciation and amortisation astatine completion, earlier deleveraging to astir 1 times wrong 3 years, fixed PAM’s currency conversion supra 60%.

The broker introduced pro forma forecasts but near its published estimates unchanged pending Irish overseas nonstop concern clearance, which could instrumentality up to 90 days.

On a combined basis, RBC forecast 2027 gross of £205m and adjusted net earlier interest, tax, depreciation and amortisation of £28.5m, implying a 13.9% borderline including £1m of outgo synergies.

It estimated net per stock of astir 14.1p successful 2027 connected 108.8m shares, equating to astir 2.5% accretion successful twelvemonth one.

With outgo synergies rising towards £4.5m by twelvemonth three, RBC expected net accretion to transcend 20% by 2029.

The broker modelled one-off integration costs of astir £3m successful some 2027 and 2028.

Applying a 10.5 times aggregate to 2027 endeavor worth to adjusted net earlier interest, tax, depreciation and amortisation, successful enactment with its discounted currency travel derived valuation, RBC calculated a pro forma equity worth of 255p per share.

Discounted currency travel values a institution by estimating its aboriginal currency flows and discounting them backmost to contiguous utilizing a weighted mean outgo of capital.

RBC concluded that the acquisition strengthened Optima’s standard and strategical position, portion execution and regulatory timing remained the cardinal near-term variables.

In day trading, the shares were down 2% at 198p.