Fleury: new acquisition brings a number of points of interest, says XP

The new acquisition made by Fleury (FLRY3) can bring attractive multiples to the company, which faces a difficult scenario amid the high claims ratio of health operators, XP Investimentos said in a report.

Fleury announced the acquisition of Retina Clinican eye care provider, for R$ 21 million.

The clinic operates in partnership with Clínica de Olhos Dr. Moacir Cunha, which was acquired by Fleury in 2021. According to Fleury, the company generated gross revenue of R$23.4 million in 2021.

THE XP expects the new business to generate “significantly lower” margins for Fleury, considering the lower bargaining power and the brand.

Considering a 10% growth in gross revenue in 2021 and 2022, deductions of 7.5% from gross revenue and an Ebitda margin of 15%, the house analysts estimate that the value of Ebitda (earnings before taxes, depreciation and amortization ) of the business is R$3.6 million.

The value translates into an EV/Ebitda multiple (an index that shows how many years the company’s operating profit would take to pay for the investment made to buy it) of 5.9x expected for 2022 — which is attractive considering that Fleury is currently trading at 6.4x.

Fleury’s operation brings synergies

THE Fleury’s new acquisition it also strengthens the ecosystem and should increase the representation of new businesses within the company’s results.

“We see room for revenue synergies, as the clinic can increase demand for clinical analyzes and other tests provided by Fleury’s core business, strengthening the ecosystem that the company is building.”

“Although small (less than 0.5% of market value), we see the business as strategically positive”, concludes XP.

XP maintained its neutral recommendation for the Fleurystipulating a target price of BRL 29 — which implies a potential for appreciation of 61.8%, given the price of the securities at the close of the last trading session.

Source: Suno