In an industry where scale matters, the 2024 acquisition of Peters Surgical has doubled the size of AMS’ Surgical business, which is now the dominant part of the group, accounting for 92% of FY25E EBITA. The deal brings greater reach and range and offers significant cost and revenue synergies. This comes at a time when the organic growth outlook was already improving. Our 3-year EPS CAGR is 20%, albeit growth is back-end loaded. This is partly why the deal has not been greeted with universal enthusiasm, but the shares are now trading at 10-year valuation lows. In our opinion, a strong buying opportunity has emerged, with scope for the shares to nearly double from here over the next 2-3 years. We initiate at BUY, with a starting 252p TP.
