LIMES signed a preliminary yet binding agreement to acquire the operating company of the "Villa Boccella" estate in Lucca, Tuscany. In our view, that significantly increases the attractiveness of LIMES' equity story beyond the pure financials. Here are the key takeaways:
Prime estate. Located in the heart of Tuscany (near Pisa), the recently renovated estate offers six individual villas, four pools and a 14-hectare lot. This makes for an ideal addition to the group's current portfolio, bridging the gap between LIMES' ultra luxury clinic in Zurich and its locations in Germany.
Clinic opening. Subject to obtaining a clinic license from the relevant authorities, the opening is planned for early summer next year. Importantly, no major renovations are necessary as the whole estate is currently still operated as a luxury vacation destination.
Financial implications. As Boccella is closing a gap in LIMES' offering, demand for therapy slots should be high, in our view (Q1 results suggest that ramp ups of Abtsee and Bergisches Land are well ahead of schedule). On an annualized basis, Boccella is seen to add € 15-20m in sales (eNuW: € 15m) at margins above current group levels (eNuW: 30%). As per LIMES' asset light business model, cash conversion is seen to be high (eNuW: 60-70%). Importantly, LIMES did not purchase the property in order to keep the group's balance sheet light and ROE high. If needed, LIMES could buy the property thanks to a purchase option. Total investment volume for the operating company and some refitting should be roughly € 6m, eNuW.
Our take. The expansion into Italy further underpins the LIMES success story. With its strong brand recognition, a differentiated referral ecosystem and a structurally undersupplied market, growth should persist beyond 2028 (eNuW). With its successful clinic blueprint, we would also not rule out additional European clinics for the mid- to long-term. The maiden dividend alongside the strong Q1 figures demonstrates that LIMES has entered a new phase of financial maturity, transitioning into a self-funding, cash-generative healthcare platform within an attractive niche. With demand for its Zurich location high (including a waiting list) and the ramp ups up Abtsee and Bergisches progressing well, the coming quarters could serve as additional share price catalysts.
We confirm our BUY rating with an increased € 810 PT (old: € 710) based on DCF as we reflect Boccella in our estimates from FY27e onwards.
ISIN: DE000A0JDBC7
