Optima Health's £100m acquisition will help it scale; brokers call PAM deal defensive and earnings-enhancing

Optima Health PLC's (AIM:OPT, OTC:OHLTF, FRA:J3N) agreement to bargain rival PAM Healthcare for astir £100 cardinal has been framed by brokers arsenic a antiaircraft onshore drawback that accelerates the institution towards its ambition to predominate the UK outsourced occupational wellness market.

Cavendish said the acquisition, Optima’s largest since its September 2024 flotation, would assistance the enlarged radical to astir 15% pro forma marketplace share.

It volition besides “significantly” accelerate the concern towards management’s targets of £200 cardinal gross and £40 cardinal adjusted net earlier interest, tax, depreciation and amortisation successful the mean term.

Panmure Liberum said the woody would make the wide marketplace person with 15% of the £1.6 cardinal UK and Republic of Ireland occupational wellness market.

And it argued that the strategical vantage should not beryllium underestimated due to the fact that a rival bidder could person made Optima’s enactment ambition “much much challenging”.

Both brokers pointed to valuation discipline, with Cavendish putting the terms astatine astir 12.2 times historical adjusted EBITDA and Panmure saying the guardant multiple, including first-year synergies, was astir 9.6 times, somewhat beneath Optima’s ain trading multiple.

The financing operation has besides drawn attention, due to the fact that Optima plans to money the acquisition with £70 cardinal of caller slope facilities and a £30 cardinal span indebtedness from Deacon Street Partners, controlled by Lord Ashcroft, the company’s largest shareholder.

It volition past launch a afloat underwritten £35 cardinal unfastened connection priced astatine 175p to repay the span and screen costs.

Panmure Liberum said the bridge-and-open-offer operation enabled Optima to perpetrate to currency outgo rapidly “without the hazard of a placing”, and described the unfastened connection terms arsenic “attractively” set.

Cavendish upgraded its forecasts to bespeak the transaction, lifting adjusted EBITDA expectations for the twelvemonth to March 2027 to £28.2 cardinal from £19.6 cardinal and for March 2028 to £34.4 cardinal from £22.4 million, portion besides raising its adjusted net per stock forecasts for those years.

Panmure said the operation should make “significant economies of scale” that enactment borderline betterment implicit time, and it modelled accelerated deleveraging fixed what it described arsenic beardown currency procreation successful the enlarged group.

On valuation, Cavendish acceptable a 271p people terms and argued Optima’s standing implied a discount to precedent transactions, portion Panmure kept a 225p people up of completion but said a pro forma worth of 250p looked due erstwhile the woody and unfastened connection are reflected.

In aboriginal day trading, the banal was trading at 209.9p.