Sonic takes full ownership of CPL
PATHOLOGY and radiology provider Sonic Healthcare will take full ownership of its US subsidiary Clinical Pathology Laboratories (CPL), paying $US82.7 million ($105.14 million) for the 18 per cent stake in the company it does not already own. Sonic said today it had decided to fully acquire the company to take advantage of synergies and rationalisation benefits.
“With the benefit of operating in the US market for over a year, the acquisition of American Esoteric Laboratories, and with possible further acquisition opportunities, Sonic has determined that it is preferable to wholly own CPL to facilitate synergy capture and rationalisation,'’ the company said in a statement.
The purchase price will be made up of $US41.6 million in cash, as well as 4,171,732 Sonic shares.
The shares will be issued at $12.52 a share, representing a five per cent discount to their closing market price on December 8 when the transaction was proposed.
Sonic took an 82 per cent stake in CPL last August for $US300 million ($381.41 million).
It had a pre-agreement with CPL’s management and pathologists, the bearers of the remaining 18 per cent stake, to move to 100 per cent ownership between 2009 and 2012.
The medical group expects to settle the transaction, which it said would be immediately earnings per share accretive, on January 29.
Sonic said all shares would be subject to a 12-month escrow and Sonic shares issued as consideration would not be entitled to the company’s 2007 interim dividend, though they would otherwise rank equally with existing Sonic ordinary shares.
At its full year results in August, Sonic said it expected EPS to grow by 10 per cent this financial year.
It reported a record $172.03 million net profit in 2005/06, up 27.1 per cent on the previous year.