How Tommasi is defending himself against Fleury’s arrival: doing M&As

How Tommasi is defending himself against Fleury’s arrival: doing M&As

In the last 60 years, Tommasi has established itself as the main clinical analysis laboratory in Espírito Santo — snapping up a market share of almost 50% in the region.

But since last year, the family chain began to feel the breath of competition increasingly strong on its neck.

Fleury bought Pretti and Bioclínica, Tommasi’s two biggest competitors, and should begin an accelerated expansion in the state.

In order not to be swallowed up by the national giant, Tommasi’s way out was to become a consolidator himself, transforming himself from prey to hunter.

For the first time in its history, Tommasi went shopping, acquiring three state laboratories for a total of R$100 million.

In the first quarter, Tommasi bought Labortel, which is mainly focused on serving the SUS. Now, it has just closed two more acquisitions, bringing in São Marcos and Centrolab, very strong in the north of the state.

“It’s a defensive, survival movement,” COO Bruno Tommasi told the Brazil Journal. “We are strengthening our presence in Espírito Santo to protect ourselves from these advances.”

Bruno is the son of the founder, Henrique Tommasi, who at 85 is still the CEO and chairman of the board. The network is 100% controlled by the family.

According to the heir, the network has already been approached by all the major companies in the sector, but his father never wanted to sell. “He wants to perpetuate the business and leave a legacy.”

The three acquisitions complement Tommasi’s positioning, which has a more premium focused on health plans with higher remuneration (he does not accept Unimed and São Bernardo, for example, the two largest operators in the state).

“We now have Labortel at the base of the pyramid, São Marcos and Centrolab as more combat brands, and we keep Tommasi serving the most premium audience,” said Bruno.

According to him, there is still another M&A under negotiation, which should come out later this year and complement this pyramid, placing it between São Marcos and Centrolab and Tommasi in terms of price positioning.

The network is also under negotiation for the creation of a joint venture in Rio de Janeiro, where Tommasi currently operates with 8 collection centers. (Samples are processed in Vitória).

The acquisitions will also allow Tommasi to continue growing even when Covid is over. The network earned BRL 200 million in the last 12 months, but about half of that came from contracts with companies related to covid tests.

This vertical — which should soon cease to exist — also pushed the EBITDA margin up to more than 50%.

If revenue from covid tests continues, Bruno said he expects to earn R$250 million this year. In the worst case scenario, revenues could drop to R$ 150 million. (The three networks acquired together earn R$ 50 million).

According to him, Tommasi expects to grow at a rate of 20% per year over the next five years with an EBITDA margin of 20%. For now, all M&As have been financed with the company’s own cash.

L6, a Rio-based M&A boutique focused on family businesses, advised Tommasi on the three acquisitions.

Source: Brazil Journal

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