Life Healthcare Sells LMI Stake to Lantheus for Over R13.9bn, Boosting Growth Potential

In a landmark move that reshapes its portfolio, Life Healthcare has sold its entire stake in Life Molecular Imaging (LMI) to Lantheus Holdings for a total consideration of $750 million (R13.9 billion). This deal is set to significantly impact the healthcare and radiopharmaceutical sectors, with Life Healthcare expected to retain substantial future benefits from the sale.

What the Sale Means for Life Healthcare

Life Healthcare’s decision to divest from LMI follows years of significant investment and development, particularly after acquiring the company in 2018. At the time, LMI was a burgeoning player in the radiopharmaceutical industry, specializing in molecular imaging agents. Since then, Life Healthcare has invested $66 million to commercialize LMI’s flagship product, NeuraCeq, and develop new radioisotope agents for future diagnostics.

The sale to Lantheus, a New York-listed company known for its cutting-edge radiopharmaceuticals, includes an upfront payment of $350 million (R6.47 billion), with potential earnout payments of $400 million (R7.4 billion) based on future sales milestones.

Lantheus and Life Healthcare’s Continued Collaboration

While Life Healthcare is exiting its full ownership of LMI, the company is set to maintain key commercial benefits through its existing sub-licensing agreements with Lantheus. These agreements will offer potential revenue streams for Life Healthcare, with earnouts and foreign currency profit-sharing set to further boost its financial outlook.

Life Healthcare’s future as a diversified healthcare services provider remains strong, with the company poised for growth through its integrated value-based care model.

The Significance of LMI in the Radiopharmaceutical Sector

LMI, which is based in the EU, UK, and USA, manufactures patented radiopharmaceuticals in partnership with 37 sites worldwide. The company’s positron emission tomography-computed tomography (PET-CT) diagnostic agents play a crucial role in detecting and monitoring diseases, especially in the fields of neurology and oncology.

With the sale of LMI, Life Healthcare will exit a significant portion of its business, which represented 7.2% of its total revenue for the fiscal year ending 30 September 2024.

Life Healthcare’s Growth Strategy

The proposed sale will allow Life Healthcare to focus on its core strengths in Southern Africa, expanding its integrated healthcare offerings while maintaining financial upside through its earnout agreements. The deal is expected to be finalized by the second half of 2025, following the completion of required conditions.

As Lantheus takes over LMI’s operations, Life Healthcare can look forward to a future with reduced capital outlay and no execution risks, while still benefiting from the company’s ongoing success in the global radiopharmaceutical market.

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