Highlights

  • The acquisition is expected to increase adjusted earnings per share (EPS) post first full financial year, reaching over 25% accretion by the third year.
  • Combined unaudited proforma adjusted EBITDA before synergies exceeds GBP 26 million.
  • Optima’s proforma market share will rise to approximately 15%, moving closer to its target of 25%.

Optima Health (LSE:OPT), the UK’s prominent provider of technology-enabled corporate health and wellbeing solutions, has entered into a definitive agreement to acquire PAM Healthcare Limited, a leading occupational health and wellness provider in the UK and Republic of Ireland. The acquisition, valued at approximately GBP 100 million on a debt-free, cash-free basis, will broaden Optima’s footprint and accelerate its strategic ambitions in the occupational health sector.

Acquisition Details and Financing

The acquisition is subject to clearance from the Irish Foreign Direct Investment regime, expected within 90 days of signing. The transaction marks the exit of LDC, a leading UK private equity investor, from PAM Healthcare. Optima will finance the acquisition through a combination of new secured debt facilities totaling GBP 70 million, arranged with HSBC and Barclays, and a GBP 30 million unsecured short-term bridge facility provided by Deacon Street Partners Limited, an entity controlled by Optima shareholder Lord Ashcroft KCMG PC.

Following completion, Optima intends to repay the bridge facility via an underwritten open offer of GBP 35 million to qualifying shareholders at 175 pence per new share. The company plans to launch the open offer promptly after completion, following consultation with the Takeover Panel regarding compliance with the City Code on Takeovers and Mergers.

Additional anticipated synergies from revenue and cost efficiencies are expected to exceed GBP 5 million annually by the third year, with around GBP 1.5 million projected in the first year alone. The enlarged group aims for rapid deleveraging, targeting a net debt to adjusted EBITDA ratio below 1x by year three.

Strategic Rationale and Market Opportunity

PAM Healthcare reported unaudited revenues of approximately GBP 66.6 million and adjusted EBITDA of GBP 8.2 million for the year ending 31 December 2025, growing at a three-year CAGR of 15.7%. Over 90% of PAM’s FY26 revenues are secured under existing contracts, highlighting the business’s stability.

The UK and Irish occupational health markets are valued at around GBP 1.6 billion and forecast to grow up to 9% annually. With only 45% of UK workers currently receiving occupational health services, compared to over 80% in peer European markets, significant expansion potential remains. The market’s fragmentation offers Optima an opportunity to further consolidate through its acquisition experience.

Optima aims to leverage combined scale to enhance clinical delivery, technology use, AI integration, and provide comprehensive service offerings. The acquisition also deepens the company’s presence in Ireland and offers expanded cross-selling opportunities.

The acquisition of PAM Healthcare represents a significant step for Optima Health in expanding its leadership in the occupational health and wellbeing sector across the UK and Ireland. The transaction supports the company’s medium-term targets for revenue and EBITDA growth.

FAQs

Q1: What is the total consideration for Optima Health’s acquisition of PAM Healthcare?
A1: The acquisition is valued at approximately GBP 100 million on a debt-free, cash-free basis, subject to customary adjustments.

Q2: How will the acquisition be financed?
A2: Financing will come from GBP 70 million in secured debt facilities with HSBC and Barclays, and a GBP 30 million unsecured short-term bridge facility from Deacon Street Partners, planned to be repaid via an underwritten GBP 35 million open offer.

Q3: What are the expected benefits of the acquisition?
A3: The acquisition is expected to boost adjusted EPS by over 25% by year three, increase Optima’s market share to 15%, and generate more than GBP 5 million per annum in revenue and cost synergies by year three.