Health company deal a boost to Ebos turnover

By Chris Hutching

Friday 24th March 2000

Christchurch-based Ebos Group is consolidating its strategic links at home before refocusing on its Australian interests.

The medical supplies specialist is one of the top-five yielding companies on the Stock Exchange and last year doubled its size with the purchase of Australian medical wholesaler Richard Thomson Pty.

Next week it holds a special meeting for shareholders to ratify the purchase of Auckland-based Medic Corporation, which will boost Ebos Group sales from $70 million to more than $100 million.

And according to a well-placed market source, Ebos is also poised to increase the 50% stake it bought last year in another Auckland company, Health Support Ltd, which has annual revenues of $90 million and key shareholders including Auckland Healthcare and Waitemata Health.

Equity accounting would see the turnover of Ebos Group boosted to around $150 million.

Meanwhile, the acquisition of Medic will be achieved by issuing 3.5 million shares worth about $12 million to Medic's owner, Wellington-based investment group Rangatira Ltd, making it the second-largest shareholder in Ebos after director Peter Kraus who has 30%.

Ebos managing director Mark Waller said Mr Kraus was supportive of the new cornerstone shareholder Rangatira.

He said Medic and Ebos had complementary brands but would continue to run two separate sales and marketing operations to retain their own focus.

"There are pretty substantial back office efficiencies we'll be making but in our experience when you throw everything in one big pot you lose direction. Medic is involved in the dental sector and Ebos has strengths in other areas. We'll amalgamate some things.

"What we're trying to do is no different from what Giltrap has been doing in the motor industry where he has a Mercedes franchise in one place and Volvo in another but behind the scenes he's doing all the back office accounting and financing.

"Our Australian plans have gone as we planned. It's still our strategic focus but there are some fantastic opportunities in New Zealand that will eventually allow us to achieve our goals in Australia in a bigger way than we might otherwise be able to do."

Mr Waller said Health Support controlled important distribution channels and had key relationships with Ebos competitors including multinational companies. The deal has taken 18 months of talking and nine months of serious negotiation. Health Support is a wholesaler to the hospital market, acting as a warehouse for new hospitals.

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