It's no secret private equity firms are running the ruler on plenty of listed Australian companies as they seek to spent a giant $5.8 billion dry powder warchest.
But here is a new one for takeover watchlists.
Street Talk understands listed home care and allied health roll-up Zenitas Healthcare has propped on to the radars of at least a small handful of Australian buyout firms.
Zenitas pitches itself as a fast-growing provider of community based healthcare services, aimed at reducing the high cost of acute hospital care.
Its strategy has been to busily acquire smaller operators and has told investors it has a "strong pipeline acquisition opportunities".
The roll-up strategy is underpinned by its ability to access capital markets. And as a listed company, raising equity is a quick and relatively simple way to fuel growth; Zenitas tapped equity markets late 2016 for its listing and against last October to pay for purchases.
The problem for Zenitas is eyes may be bigger than its investors' stomachs.
The company's shares are trading at less than $1.15, which is where it raised equity late last year, and what you would think would be the base price for any new equity offer.
Add in the fact it is in a growing industry - and one very familiar to a handful of Australian private equity investors - and it's easy to see how Zenitas pops up as a potential buyout candidate.
Sydney-based Adamantem Capital and Melbourne's Advent Partners would be expected to be interested if the business was put up for sale, along with Quadrant Private Equity which owns allied health company Home Care Holdings.
At an $80 million market capitalisation, Zenitas is about the right size for a mid-market private equity firm.
But as always, the question is price. Private equity investors are generally shrewd buyers. But one thing they're not lacking at the moment is access to capital.
ZNT Price at posting:
$1.14 Sentiment: Buy Disclosure: Held
