Australia's Sonic Healthcare up 2.5% on German laboratories deal

SHL-Japan

03/04/2023 06:20

(Updates with Jefferies comments)
    ** Sonic Healthcare Ltd  SHL.AX  rises as much as 2.5% to
A$35.70, its highest since Aug. 26, 2022
    ** Medical diagnostics firm says acquired Diagnosticum group
of laboratories operating in Germany for 190 mln euros ($205.03
mln)
    ** Diagnosticum expected to generate revenue of 65 mln euros
in FY2024 - SHL 
    ** SHL says cash- and debt-free acquisition to be funded by
existing cash and debt facilities
    ** Adds deal is immediately EPS-accretive, and return on
invested capital will exceed SHL's cost of capital
    ** SHL set for a fourth straight session of gains; up 16.3%
this year, as of last close, vs a 2% gain in the ASX 200
benchmark index  .AXJO 
    ** Jefferies hikes price target to A$37.30 from A$36.30,
retains "hold" rating
        ** SHL taking advantage of its acquisition headroom as
German base business clinical lab testing recovers, brokerage
says
  
        ** Adds it would not be surprised to see further
acquisitions for SHL in the near-to-medium term
  
        ** Hikes NPAT forecast by 1.4% to A$666 mln ($443.82
mln) for FY24, and by 1.9% to A$706 mln for FY25
  

    
($1 = 0.9267 euros)
($1 = 1.5006 Australian dollars)

 (Reporting by Sameer Manekar in Bengaluru)
 ((Sameer.Manekar@thomsonreuters.com; Twitter: https://twitter.com/sameer_manekar))