The size of Sonic Healthcare's (ASX:SHL) acquisition of the LADR Laboratory Group Dr. Kramer & Colleagues in Germany raises antitrust issues that may force some divestitures, potentially impacting the economics of the acquisition, Jarden Research said in a Tuesday note.
Sonic Healthcare recently disclosed that it will acquire the laboratory testing services provider for 423 million euros and expects the acquisition to be immediately accretive to earnings per share.
The investment firm notes that the acquisition will increase the company's German revenue by about 34% in 2024, which is expected to increase in 2027 once the entire acquisition is complete.
The firm also believes that due to the size of this acquisition, the company is likely to "cap out" its ability to continue to acquire in Germany.
Jarden Research maintained its neutral rating on the company and raised its target price to AU$29.04 from AU$28.06.
Price (AUD): $28.34, Change: $+0.06, Percent Change: +0.21%