HLS +7.45% was up nicely today on news it has agreed to sell its imaging unit Lumus to U.S-based Affinity Equity Group for $965 million. As per our last note on HLS, we expected a sale price of circa. $700 million. We think this is a good price given Lumus has been loss-making for the past 2 years.
- Transaction to net $800 million after fees and taxes
- Potential return of cash proceeds to shareholders after paying down debt.
The sale will provide much needed support to the HLS balance sheet which was previously stretched and importantly to allow the business to focus on their key areas. Volume growth in pathology is continuing which is promising for the stock.
MM remains long & bullish HLS
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