30% of guided fiscal 2021 sales), especially in cross-selling opportunities for new customer accounts. Leveraging AGTI's expertise in the space, I see plenty of potential synergies to be realized within Equipment Solutions (c. 3k acute-care and post-acute care medical facilities.
The Sizewise Rentals acquisition makes sense in this regard, considering it operates in the specialty beds & surfaces space that AGTI knows well – for context, Sizewise is a manufacturer and distributor of specialty capital equipment to a customer base of c. Strategic Rationale in Line with "Overlap and Extend" PhilosophyĪGTI's M&A philosophy has always been focused on tuck-in acquisitions characterized by its "overlap and extend" strategy, allowing it to leverage its infrastructure by acquiring incremental service lines. Even with the incremental debt, however, the additional EBITDA contribution should limit the impact on pro-forma leverage levels, and I see a reasonable 3.5-3.6x leverage ratio as likely (modestly up from 3.2x at end-FQ2' 21). $15 million of synergies by fiscal 2024, although considering the majority of savings are from the SG&A line, I see plenty of upside if management executes successfully. Assuming a 35/65 financing split between cash on hand and new debt, AGTI also appears well-equipped to deliver healthy ROIC returns once synergies are fully phased in. In particular, Sizewise appears to be a good fit with AGTI's Equipment Solutions business, with the low to mid-single-digit % top-line growth outlook likely to support a gradual margin expansion path in line with the corporate average. The addition of Sizewise reflects AGTI's M&A approach targeting established private assets that are complementary to its existing verticals.
$475 million Northfield acquisition, which collectively adds over $50 million of EBITDA generation at a reasonable price, in turn, driving 20+% accretion. $12 billion enterprise value offer for Hill-Rom ( HRC) implies c. which compares favorably to comparable deals in the space. $230 million purchase consideration equates to c. Attractive Valuation for Sizewise Deal Points Toward Accretive OutcomeĮncouragingly, AGTI has shown good valuation discipline with its latest acquisition - the c. Finally, with balance sheet flexibility also intact, I see continued growth-focused M&A ahead and, thus, remain upbeat about its growth and margin expansion prospects. 8x EV/EBITDA multiple (as disclosed by AGTI) is well below comparable transactions. The valuation also screens favorably as the implied c. The acquisition appears to be a great fit for AGTI strategically and should boost its "overlap and extend" strategy going forward. Agiliti ( NYSE: AGTI), a leading US-based medical equipment management services provider, has recently completed the acquisition of Sizewise, a specialized medical equipment manufacturer and distributor, for a c.
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