Medical diagnostics company Fleury has agreed to acquire rival Hermes Pardini, the companies said on Thursday (30), in the latest step in the consolidation seen in the Brazilian health sector.
According to the terms of the transaction, Pardini shareholders will receive approximately 1.21 Fleury common shares for each common share they hold in the company, plus approximately R$ 2.15.
At around 11:30 am, Fleury’s shares soared 13.89%, the biggest increase being the Ibovespa, which yielded 1.68% with a negative external scenario. Hermes Pardini shares, which are not part of the main Brazilian stock market index, jumped 20%.
The deal is positive, in the view of Credit Suisse analyst Mauricio Cepeda, citing potential synergies. He calculates a premium of around 14% in the agreement, with the cash portion to be disbursed by Fleury totaling 273 million reais.
The companies expect the transaction to increase competitiveness in the healthcare and diagnostic medicine sector “with geographic complementarity and national presence…and enhanced organic and inorganic growth.”
Pardini has consolidated operations in places such as Minas Gerais, the state of its headquarters, Goiás and Pará, places where Fleury is not present or has smaller structures.
The Hermes Pardini brand will be maintained for at least 10 years, with the possibility of expanding to new units, according to the statement.
The parties’ estimate is that the deal generates an increase in the combined company’s annual EBITDA of between R$160 million and R$190 million.
Fleury also said that until the completion of the transaction, it will be able to carry out a capital increase of up to 70.6 million shares, via private subscription or public offering, “to maintain its growth strategy”.
The transaction is subject to approvals, including from the shareholders of both companies and from the antitrust agency Conselho Administrativo de Defesa Econômica (Cade).
If the shareholders of any of the companies do not approve the deal, meeting certain conditions set out in the signed documents, a fine of R$ 250 million will be paid by the company in question.