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Afya Snaps Up Cliquefarma

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Medical education group Afya Ltd. has acquired health tech company Cliquefarma. The latter operates a free-of-charge website that follows the pricing of prescription drugs, cosmetics, and personal hygiene products in Brazil.

Afya (AFYA) CEO Virgilio Gibbon said, “The acquisition of Cliquefarma will enhance our Digital Prescription pillar, creating the opportunity to leverage traffic and GMV with prescriptions generated from Afya’s Physician Ecosystem.”

Gibbon added, “We are also very pleased that Angelo Alves and Cezar Machado, Cliquefarma’s founders, will join Afya’s Digital team bringing more than 25 years of experience in the healthtech market.” (See Afya stock analysis on TipRanks)

While Cliquefarma’s website is free to use, it monetizes the traffic via a cost-per-click model, with drugstores paying for each ad clicked. It allows users to look up medications and healthcare products and compare pricing from more than 5000 pharmacies in Brazil.

Cliquefarma had 20 million visitors in 2020 with a gross merchandise value of R$43.2 million. This indicates year-over-year revenue growth of 52.9%.

The total consideration for the acquisition is R$19 million. Afya is making 84.2% of this purchase in cash and the rest is in Afya shares. Furthermore, a R$3 million earn-out may be paid associated with product development.

On April 15, UBS analyst Vinicius Ribeiro upgraded the stock to Buy from Hold but did not assign any price target. Ribeiro believes that Afya’s resilience is underappreciated at current price levels.

The other analyst covering the stock, J. P. Morgan’s Marcelo Santos ,also upgraded the stock to Buy from Hold and assigned it a $34 price target (42.7% upside potential).

Based on the two ratings, consensus for the stock is a Moderate Buy. Shares have gained 21.6% over the past year.

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