Summary · why it matters
Custom Health Holdings Inc landed Buy-rated coverage from Stifel with a C$12 price target, and subsequently signed a binding letter of intent to acquire Wisconsin-based Evergreen Pharmacy LLC, a deal expected to add more than US$78 million in annual revenue. Stifel analysts see upside as high as C$18 a share for the company, whose pill-dispensing platform achieves a 98% medication adherence rate and already has more than 100,000 patients contracted through major US health plans including Humana, Elevance and BlueCross BlueShield. The firm expects the active patient count to nearly triple next year to 17,000, with revenue more than doubling, aided by the recent acquisition of InnovativeRx. The Evergreen deal carries a total price tag of US$3.5 million, including at least US$1 million in prescription drug inventory and US$450,000 in net working capital, and adds a Midwest footprint with licenses in Wisconsin, Illinois and Michigan. Stifel sees a path to EBITDA margins in the high teens, driven by the Spencer device's recurring revenue opportunity of close to US$200 million at gross margins above 60%, layered on traditional pharmacy dispensing margins around 20%.
Elevance Health Inc
Humana Inc
Stifel Financial Corporation