Target Information

Viveo, a major player in the healthcare supply industry, has announced the acquisition of three companies specializing in the distribution of medical-hospital products and laboratory reagents for a total of R$ 82 million. The companies acquired include Apijã, Laborsys, and Macromed, which together generated a combined net revenue exceeding R$ 85 million and an EBITDA of R$ 15 million over the past year.

Apijã serves the regions of Goiás and Tocantins, Laborsys has a strong presence in Paraná and Santa Catarina, while Macromed operates in São Paulo and Mato Grosso do Sul. These acquisitions were exclusively advised by FT Aquisições.

Industry Overview

In Brazil, the market for laboratory supplies for both public and private institutions is estimated at R$ 3.5 billion, with reagents representing the most significant segment, accounting for approximately 40% of market share. The increasing demand for laboratory services and diagnostics has driven significant growth within this sector.

The reagents business forms part of Viveo's Laboratories Division, which recorded R$ 122 million in net revenue in the first half of the year, marking a substantial organic growth of 75% year-on-year, and an impressive 190% growth when including recent acquisitions. This trend highlights the robust expansion of the reagents market in Brazil.

Viveo has strategically enhanced its market presence through acquisitions over the past four years, having completed 17 acquisitions to date. This growth strategy has allowed the company to establish a comprehensive offering of consumables and disposable materials, encompassing pre-analytical processes through to reagents required for testing.

The company is also planning to invest in a B2B marketplace aimed at connecting small suppliers of laboratory inputs with laboratories, which could further streamline the supply chain and enhance market efficiency.

Rationale Behind the Deal

The recent acquisitions are aligned with Viveo's long-term strategy to strengthen its position in the laboratory supply market, particularly in reagents. By adding these companies, Viveo enhances its distribution network and expands its revenue base significantly.

The strategic acquisition of companies that have already established customer bases in different regions also allows Viveo to reduce logistical challenges and improve service delivery, creating synergies across its operations.

Investor Information

Viveo has made substantial investments aimed at building a comprehensive ecosystem for health supplies since 2018, where initial revenue was only R$ 30 million. The recent successful acquisitions reflect the company’s commitment to growth and market leadership in the healthcare supply sector.

Despite facing challenges, such as stock performance, with shares closing at R$ 18.75, marking the lowest price since the IPO, Viveo's overall market valuation stands at R$ 5.4 billion, showcasing investor confidence in its growth strategy and potential.

View of Dealert

The acquisition of the three companies by Viveo is perceived as a strategic move that could significantly benefit the company by consolidating its position in a competitive market. With a clear trajectory of growth and increasing revenue streams, the investments appear well-calibrated to enhance operational efficiencies and scale.

From an investment perspective, the deal seems prudent, especially considering the strong fundamentals of the reagents market and the anticipated revenue boost from the newly acquired entities. The positive growth trends observed in Viveo’s performance support this outlook.

Furthermore, Viveo’s ongoing strategic initiatives, such as the proposed B2B marketplace, indicate a forward-thinking approach aimed at optimizing supply chain connections within the industry. This could create additional value by improving distribution channels and supplier relationships.

Overall, while the recent dip in stock price may raise concerns, the long-term fundamentals and growth strategy behind this acquisition suggest that Viveo is positioned for continued success in the healthcare supply sector, making this acquisition a potentially favorable investment.

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