Notes to Myself…Akumin Inc.

Notes to Myself…Akumin Inc.

A couple of fund managers I follow have both mentioned the stock of this company, so I thought I would start following it…

Market Cap : 204.2 Million

Stock Symbol : AKU

Company Profile

Akumin Inc is a United States-based company, which provides freestanding, fixed-site outpatient diagnostic imaging services in the United States. The Company owns, operates or manages 89 centers located in Florida, Pennsylvania, Delaware, Texas, Illinois and Kansas, the United States. The Company's centers provide physicians with imaging capabilities to facilitate the diagnosis and treatment of diseases and disorders and reduce unnecessary invasive procedures. The Company's services include Magnetic Resonance Imaging (MRI), Computed Tomography (CT) and Positron Emission Tomography (PET), radiology, ultrasound, diagnostic radiology (X-ray), mammography, arthography and other related procedures.

Fund Manger Insights

Akumin is a consolidator in the U.S. healthcare space focusing on outpatient diagnostic imaging centers. It’s currently the number 2 independent operator in the U.S.

Management has a very good track record of successfully completing acquisitions.

Lots of runway to grow scale given fragmented industry with the ability for organic growth.

Michael Decter, CEO and chief investment officer at LDIC Mutual Fund Corporation Inc, Nov 12, 2019

Akumin has been executing well on their business plan of acquiring and operating diagnostic imaging clinics focusing on MRI, CT scans and other procedures in the U.S. They’re now the number two player in the U.S. outside of publicly traded RadNet  (RDNT-US) with 130 centres. Their business has several tailwinds including demographics, operating leverage as they scale and volume growth from insurance companies encouraging patients to utilize freestanding clinics versus the more expensive hospital centres. While growth has been robust, we’re even more impressed with the margin profile at less than 20 per cent on EBTIDA and their ability to integrate new acquisitions. Given their execution to date we believe that the current multiple of five times EV/EBITDA is too far out of line with peers other consolidators. We consider this level to be an excellent entry point as the next phase of their business plan unfolds which should include even more organic growth and free cash flow.

James Telfser partner and portfolio manager at Aventine Asset Management, Oct 15, 2019

A longtime favourite of his. AKU is a consolidator of imaging centres (x-rays, CAT scans, MRIs) at outpatient centres. There are bigger competitors, but they're trading at a higher 9x multiple than AKU. AKU trades around 8x. Today's acquisition was at 7x and addeds $30 million more EBITDA. There's still lots of consolidation to go in the U.S. So AKU can keep buying. Lots of runway ahead.

Michael Decter, CEO and chief investment officer at LDIC Mutual Fund Corporation Inc, April 15, 2019

Company Website,

https://akumin.com/

Resources,
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