further acquisitions and NSW expansion

ASX ANNOUNCEMENT 27 April 2015
Capitol announces further acquisitions and NSW expansion
The Directors of Capitol Health Limited (ASX:CAJ, “Capitol”) wish to advise that Capitol has
expanded its NSW radiology presence via the acquisition of Eastern Radiology Services (“Eastern”)
and Sydney Radiology (“Sydney”). The acquisitions have a combined Enterprise Value of $30.0
million and are subject to customary closing conditions. Both of the above acquisitions are
expected to be completed by 1 July 2015, subject to the normal conditions precedent being met.
Key transaction highlights include:
 Further inroads and market share in NSW, building on the recent Southern Radiology
acquisition and complementing its network;
 High quality radiologists, including Dr Ken Sesel, agreeing long term commitments to Capitol;
 Specialist capabilities producing high margins, with a large non-Medicare earnings base;
 Combined FY14 revenue of $13m and FY14 EBITDA of $3.75m;
 Capacity to extend trading hours, drive synergies and manage workflow by integrating into
the existing NSW network;
 Funded from existing bank facilities and cash; significant debt headroom remaining;
 Immediately EPS accretive.
Eastern, located in Bondi Junction, is a substantial operation that has had two MRI licences
allocated to it in the Federal government MRI Expansion Program.
Sydney is a boutique operation located in Cremorne that offers Capitol opportunities to expand and
market high value services to Sydney’s north shore.
Further to the above, Capitol has commenced the commissioning of a clinical facility in Broken Hill.
Managing Director John Conidi commented, “Capitol continues its expansion in the New South
Wales market with targets that will add shareholder value. Both Eastern and Sydney are high
quality businesses with strong radiologists and specialist expertise. The businesses have generated
strong revenue growth and high margins which we believe we can enhance. These sites are
strategic in nature and complement the recently acquired Southern network. We will look to add
further clinics to the network on selective basis utilising the existing debt headroom we have. The
expansion in Broken Hill provides support and resources for rural regions and is an area of interest
for the company.”
_____________________________