Afya Limited AFYA, a leader in medical education and practice solutions in Brazil, has taken another significant step toward strengthening its market position. The company has announced a share purchase agreement to acquire 100% of Faculdade Única de Contagem (FUNIC) through its subsidiary, Afya Participações S.A.

Located in Contagem, a city in the metropolitan area of Belo Horizonte, Minas Gerais, FUNIC will become Afya’s fifth medical school in the state. The acquisition brings an immediate addition of 60 medical school seats, further enhancing Afya’s capacity to educate future healthcare professionals. With a pre-operational campus already equipped for academic activities, FUNIC is poised to become an academic hub supporting Afya’s other medical campuses across Minas Gerais.

The total purchase price for the acquisition is R$ 100 million, with R$ 60 million to be paid upfront in cash at closing. The remaining R$ 40 million will be settled in three annual installments, adjusted by Brazil’s interbank interest rates. Additionally, there is potential for an expansion of 60 more seats. If approved by Brazil’s Ministry of Education within three years, this could lead to an extra payment of R$ 1 million per seat, capped at R$ 60 million.

Afya anticipates significant financial returns from this acquisition. The company expects an EV/EBITDA multiple of 3.3x at full maturity by 2030, with expected net revenues of R$ 52.4 million, all derived from the medical education segment.

Subject to customary closing conditions, including antitrust approval, this acquisition aligns with Afya's strategy to solidify its leadership in Brazil’s medical education market. By leveraging synergies and expanding the company’s network, Afya is positioning itself for robust long-term growth while delivering substantial value to stakeholders.

With this acquisition, Afya continues to demonstrate its commitment to advancing medical education in Brazil, fostering innovation and creating opportunities for future healthcare professionals.

Afya’s Price Performance

Shares of the company have lost 5.7% in the past three months against the industry’s growth of 7.7%.
 

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However, the company’s focus on accretive buyouts, operational restructuring efforts and other business initiatives to offer top-tier medical education services are likely to bring the stock back on track.

The company currently has a Zacks Rank #3 (Hold).

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