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Investing.com -- Shares of Medicover (STO:MCOV) fell by 2.7% today after the healthcare and diagnostic services provider announced the acquisition of Synlab’s businesses in various European countries. The deal, valued at €71.3 million, is set to expand Medicover’s footprint into three new markets but has raised concerns among investors.
The acquisition, which will be consolidated from the second quarter of 2025, includes operations in Romania, Turkey, Cyprus, Slovenia, Croatia, and North Macedonia.
These businesses generated revenue of €48 million in the fiscal year 2024. Medicover expects the deal to be accretive to earnings per share upon consolidation and projects to achieve more than 50% of the current profitability of the acquired entities within the next 12 months and over 100% in the subsequent 12 months.
The company has outlined plans to generate synergies by centralizing advanced testing volumes and procurement.
The acquisition is fully financed through Medicover’s existing committed loan facilities, which may have contributed to investor concerns about the financial impact and the integration of the new businesses.
Analysts at Jefferies commented on the acquisition, noting potential benefits in the longer term: "Assuming a 5-10% EBITDA margin in FY24 and the margin expansion progresses as detailed, implies the acquisition could grow FY26 group Adj. EBITDA by <3.0%."
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