Sonic Healthcare expands market today

| August 13, 2007

Aug. 13 (Bloomberg) — Sonic Healthcare Ltd., Australia’s biggest medical diagnostics company, agreed to buy Bioscientia Healthcare Group, gaining more than 20 laboratories in Germany.

The offer values closely held Ingelheim, Germany-based Bioscientia at 190 million euros ($260 million), including debt, Sonic said in a statement to the Australian Stock Exchange today.

The acquisition, to be completed in October, will be Sydney-based Sonic’s seventh in the past year, as Managing Director Colin Goldschmidt seeks faster-growing markets in Europe and the U.S. Bioscientia will give Sonic control of two of Germany’s five largest pathology companies and about 14 percent of the nation’s 6 billion euro ($8.2 billion) market, said Andrew Goodsall, a health analyst with UBS AG in Sydney.

“This is the first time they have acquired something where there is already a well-established chain of laboratories with national coverage,” Goodsall said in a telephone interview today. He rates Sonic’s shares a “buy” and expects them to reach A$16.99 within a year.

Sonic shares gained 43 cents, or 3 percent, to A$14.59 on the exchange after climbing as much as 6.3 percent to A$15.05.

Raising Capital

The acquisition will be funded initially by a short-term euro-denominated loan and will add to earnings immediately, the company said. Sonic may raise capital through an offer to all shareholders and is planning to sell 116,674 shares for A$14.16 a piece as part payment for Bioscientia, it said.

The German company runs 15 regional laboratories throughout Germany and other local labs in hospitals, Sonic said. Bioscientia employs more than 1,000 people and has revenue of about 125 million euros, it said. The company was founded in 1970 as a subsidiary of Boehringer Ingelheim GmbH, and was spun off through a management buy-out in 1995.

“We see our major growth coming from the western European laboratory market and the U.S. laboratory market,” Goldschmidt said in an interview by telephone today. “We do have an active pipeline of acquisitions in both areas.”

Sonic, which bought its first pathology practice in Sydney 20 years ago, agreed to buy Sunrise Medical Laboratories Inc. last month for as much as $168 million, gaining a 6 percent share of pathology services in and around New York city.

To contact the reporter on this story: Simeon Bennett in Singapore at

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