Good afternoon, everyone. I would like to welcome you to Grupo Fleury's Conference Call. Joining us today are Mrs. Jeane Tsutsui, CEO, Mr. José Filippo, CFO and IRO, and Mr. Renato Braun, IR Director. I would like to inform you that this event is being recorded and simultaneously translated into English. Before proceeding, let me mention that this presentation may contain forward-looking statements. Such statements are not merely historical facts, but rather reflect the wishes and expectations of the company's management. The words believes, expects, plans, anticipates, estimates, projects, forecasts, and similar words are intended to identify statements that involve known and unknown risks.
Known risks are uncertainties that include, but are not limited to the impact of competitiveness on prices and services, acceptance of services by the market, service transactions conducted by the company and its competitors, regulatory approvals, currency fluctuations, changes in product mix offers, among other risks described in the company's reports. Now, I'd like to turn the floor over to Mrs. Jeane Tsutsui. Please, you have the floor.
Good afternoon, everyone. Welcome to this conference call in which we announce a business combination between Fleury Group and Pardini Group today. This new company will enlarge its leading role in diagnostic medicine, becoming one of the main players in the healthcare industry, operating throughout the whole value chain and leading in the integrated journey of patients. We're very happy to announce this business combination.
On slide number three, you'll see what has been discussed as an ambition of the Fleury Group to become a leading player in the healthcare market. This business merger will strengthen our quality in diagnostics medicine. In addition to that, we continue building a relevant operation in different chains, different lengths of the value chain. These are two companies that are recognized by the quality, innovation, and their robust results. Grupo Fleury, 96 years of operations, and Grupo Pardini, 70 years of operations that have business complementarity as well as geographic footprint complementarity. Now they join forces to increase their relevance in diagnostics medicine, enlarge the complementarity of B2B and B2C businesses in different geographic locations, in addition to other business models. On slide number 4, you can see some of the strategic rationales of this transaction.
As a reminder, a simple merger of these businesses, and here you can see an estimate of combination of revenue. In the Q1 of 2022, we would have a combined revenue of BRL 6.1 billion and an EBITDA of BRL 1.6 billion. We also have relevant portfolios of recognized brands in the industry focused on quality and excellence. In total, we have 39 brands with a great regional complementarity, with very little overlapping in terms of service units in 13 economic hubs of our country. A combination with the Pardini Group, with around 56% of the revenue coming from lab-to-lab, and the Fleury Group, with the revenue coming mainly from service units. We see a major opportunity to generate value and expand our operations in the national market with recognized brands and the opportunity to capture synergies.
Around BRL 160 million-BRL 190 million of EBITDA increase per year after we have implemented synergy capture actions. We are also developing our logistics infrastructure and production platforms in diagnostic medicine and an outstanding position in the B2B, B2C, and hospitals market. Thus, our ambition is to create one of the leading companies in the diagnostic sector in Brazil. On slide number 5, I would like to draw your attention to some numbers that I have already mentioned. In the Q1 of 2022, we have a combined revenue of BRL 6.1 billion and a combined EBITDA of BRL 1.6 billion.
The group as a whole will have a total of 487 patient service centers in 24 technical areas in 13 economic hubs, 12 states and the Federal District. We will have over 20,000 employees, more than 4,000 doctors, and we will process 245 million tests with 39 brands. We are a reference. Combined, we will be an even larger reference in terms of technical quality and reputation. On slide number 6, you see how our patient service centers complement each other. On the chart on the left-hand side, you see Grupo Fleury's footprint in 10 different states with a total of 315 patient service centers already included new links such as drug infusion centers, orthopedic and ophthalmologic centers, as well as all of the diagnostic medicine units.
A total of 13,500 employees with several brands. Some of them can be seen on the slide. The Pardini Group today has a total of 172 patient service centers. I would like to draw your attention to the strong presence and acknowledgement they have in Minas Gerais, Goiás, Pará, and also some units in São Paulo and Rio de Janeiro, where we do have a small overlap of units. The Pardini Group today has 7,300 employees and many recognized brands. On the map on the right-hand side, you can see how our footprints complement each other.
With this business combination, we see an opportunity to work in three economic hubs with just a small overlap in São Paulo and Rio de Janeiro, a total of 487 patient service centers, more than 20,000 employees and 4,000 doctors, and 39 recognized brands in the country. This geographic footprint complementarity can also be seen on slide number 7, where you see the positioning of our technical areas. The Fleury Group has a technical area located in São Paulo, a central one with other technical areas, adding up to 10 in the country. The Pardini Group has a total of 14 technical areas with a major center that is highly productive. Together, the combined company will have a total of 24 technical areas, excluding the hospital technical areas from that. It's important to mention tests processing.
As I mentioned earlier, Pardini Group has a very large volume of tests in their lab-to-lab operations. As you can see on the right-hand chart, the PSC and B2B tests in millions per year. In the Fleury Group, comes predominantly from service units and hospitals. We have 98 million tests processed per year. Now, the lab-to-lab volume is only 1 million per year. On the other hand, the Pardini Group has a volume of 38 million tests processed in B2B units per year and 111 million tests processed per year in their lab-to-lab operations.
The Pardini Group today has more than 6,600 lab partners in over 2,000 municipalities of the country. This combination, therefore, shows how complementary we are in terms of increasing productivity of the different technical areas. Finally, on slide number 8, we'll see some financial indicators. Now I would like to turn the floor over to José Filippo, our CFO and IRO. Filippo, you have the floor.
Thank you, Jeane Tsutsui. Let's now talk about financial indicators and indicators related to the operations itself. Starting on slide number 8, you can see the performance of both companies in recent years. These are two companies that have been growing in terms of revenue, and this growth has come with high quality, with consistent margins. This shows how robust and relevant the financial results of both companies are. This business combination is expected to create a company that has a strong capacity to keep on growing, just like both companies have grown in the past. Now, on the next slide, this is also related to both companies' growth. The history of both companies' acquisitions.
Not only the Fleury Group, but also the Pardini Group, together with organic growth, have been able to acquire companies that leverage their growth even further. As we talked in our quarterly calls, we have grown a lot, and Pardini is also growing. Fleury has acquired Hospital Saha, and there are other acquisitions waiting for completion. Pardini has also acquired some companies in order to provide the services already contracted. Both companies have those characteristics and will continue their growth strategies also via acquisitions. Now on slide number 10, you can see the addressable market. This is a fragmented market with a low concentration that enables a lot of growth. Here you can see the opportunity per state in Brazil.
Together, we expect that these companies can offer tests with high quality, also high complex cases and tests, and we also complement the geographic footprint of each company. This business combination will lead to a very important operation, and there is an amazing growth potential. On the next stage, you can see relevant potential synergies. We estimate around BRL 160 million-BRL 190 million in recurring synergies. BRL 160 million-BRL 190 million a year. This would come from growth in different segments in which each company has strengths and a great footprint. Combining the businesses shows a great opportunity. As part of the company's history, we are going to share best practices and execute greater operational efficiency and logistics efficiency, which will lead to cost reduction.
This is an opportunity that we can anticipate and also leverage our business portfolio through products and a skilled medical staff, which is a characteristic of both companies. We estimate between 160 to 190 million BRL per year in terms of incremental EBITDA and gains of synergies excluding taxes. Now, on the next slide, you can see the transaction and ownership structure. This business combination, for each Pardini share, we have 1.31 Fleury shares. We also have a cash component of BRL 2.15 in cash per share. A reference value of BRL 2.5 billion. In terms of governance, the company today can have up to 11 board members. We currently have 10 board members.
With the combination, we'll give the opportunity for each person of the Pardini family to recommend one board member to our combined company board of directors. Now, in order to complete this transaction, we have just finished the initial phase of scheduling our company's general meetings to approve the transaction, and then we expect the approval by CADE, the Brazilian Antitrust Authority, which is needed for that phase to be completed. Once that approval is given, then we need to conduct some final actions in order to close this transaction. We would also like to draw your attention for the possibility for Fleury to promote a capital increase of up to 70.6 million shares. The goal is to continue with Fleury's strategy now together with the new company to reduce leverage and maintain the continuity of our expansion plan, either through organic or inorganic growth.
We have been executing several operations and we want to continue with these operations. With this capital increase, we'll be able to strengthen our capacity to continue with our expansion plan. Now, on the right-hand side, you can see our ownership structure for each individual company and the combined company. Fleury has Bradesco with 29.98%, doctors with 19.32% of the ownership, and other shareholders with 50.70% of ownership. Now, for the Pardini Group, the Pardini family has 64.73% stake and other shareholders have 35.27% stake. Now, with the combination, the new company will have 20.2% stake in the hands of Bradesco Diagnóstico. The doctors will have 13%.
Each member of the Pardini family will have 7.3% and a free float of 44.9% in order to guarantee the liquidity of the shares. Fleury S.A. will be the combined business company. Now, on the next slide, you can see some highlights and takeaway messages. Just a summary of what we've been sharing with you today. We're expanding our leadership in the diagnostics sector in Brazil. The combination of businesses brings us strength in order to execute and take on this leading position. We also have a complementarity in terms of regional footprint with very little overlapping of activities. We'll have a very solid portfolio of brands that are well-recognized in the industry, which would qualify us to make the most of market opportunities. A value creation through the synergy opportunities that we mentioned earlier.
On the right-hand side, you can see a summary of both companies' results in the last 12 months. As Jeane mentioned, we had a pro forma revenue of BRL 6.1 billion combined, an EBITDA with significant margins and combined leverage. This is just a summary of the financial data for you to have an idea. Now on the next slide, we focus on the timeline and the next steps. Right now, we are executing contracts, getting all of the signatures needed, and announcing the transaction to the market.
Now, the companies will hold their shareholder meeting for approval of the transaction. Then we're going to look at the conditions precedent, and we will wait for CADE's approval of the transaction. Then finally, we will get to the closing of the transaction. This is a summary of the next steps. This concludes my presentation, and now I'd like to turn the floor over to Renato to open our Q&A session.
Thank you, Filippo. Now we're going to start our Q&A session. Please dial star one to ask your question or send your questions through the email address, ri@grupofleury.com.br. Again, ri@grupofleury.com.br. Okay, let's start with our first question. Vinicius Figueiredo from Banco Itaú.
Good afternoon, Jeane, Filippo, Renato. Thank you for taking my question. My question is about the capital increase. We see that the shares of both companies have been pressed by the cost of equity and other market conditions, but the leverage doesn't seem to be a very big obstacle. In addition to the cash installment, is there any other investment that you need for the merger? And do you think that together both companies will have more opportunities to grow, either organically or inorganically?
Now I'd like to talk about the overlapping of the geographic footprint in São Paulo and Rio de Janeiro. Do you think that CADE, the Brazilian Antitrust Agency, can create problems about that, maybe against it or not? A third question, just to conclude. If you could break down among the range of BRL 160 million-BRL 190 million, what is the composition of cost and G&A?
Thank you. Hello, Vinicius. Thank you for your questions. I will start, and then Filippo will add to my answer. Well, Vinicius, you said well. When it comes to footprint complementarity, of course, this is going to be strictly analyzed by CADE. But whenever we have overlapping, which is São Paulo and Rio, we have more units of Fleury. 91 units of Fleury in São Paulo and 31 of the Pardini Group.
In Rio, we have 89 units of the Fleury Group and 13 units of the Pardini Group. It's just a little overlapping. When it comes to lab-to-lab, most of the volume is with Pardini, so that's not going to be a problem because we only have a little volume of lab-to-lab tests. Yes, there is a complementarity. Of course, we're going to go through the whole process with CADE, but we don't see major risks when it comes to that. Now, about synergies. As a reminder, the volume that we are going to process together associated to the whole logistics operation, which is a strong feature of Pardini, associated with this new distribution of technical areas across the country, leads to a possible synergy capture of BRL 160 billion-BRL 190 billion of incremental EBITDA a year.
Of course, there is a curve to capture that, and we expect that to be achieved by the third year. You know, we want to exceed 90% of the synergy capture by the third year. Of course, these are initial numbers. We still have to look into the capture of other synergy opportunities. Most of the synergies will come from gain of scale, use of logistics, a better distribution of our technical areas, but also our complementary portfolio. Today, part of the tasks are sent to be processed elsewhere.
Having this complementary portfolio is very helpful. Pardini is today a reference in toxicology, so we could broaden our portfolio of tasks in Fleury units. Of course, we're going to look into other opportunities that we might have in terms of synergies. Now, when it comes to the capital increase, I'd like to turn the floor over to José Antonio de Almeida Filippo.
Yes. Well, this is part of the continuity and the execution of the strategy we already had at Fleury, which is now going to be reinforced with the business combination. Right now, the companies continue to operate independently. They continue separated. We don't expect that to happen for a very long time, but in any way, we need to look at the continuity of our current strategy. There is a possibility of capital increase indeed, but if it is performed, it will address cost of debt right now. There is a greater market consensus today that the high interest rates will continue for a longer period of time, differently from our first view that this could happen for a shorter period of time.
When we do announce this potential capital increase, this could therefore address our debt. Now, when it comes to organic and inorganic growth, the CapEx that we have announced to the market, we have part of this CapEx associated to IT and digital transformation, customer experience and efficiency, and we want to continue investing in those areas. There is also the organic aspect. We need to pay out the acquisitions that we have completed, but that have not been executed yet, associated to a pipeline management that we shared with you. This is a fragmented market that offers many opportunities, and we wanna make sure that we're going to do this in a structured way. With a healthy capital structure, we'll be able to execute our strategy. This is our view. It's just a continuity of the strategy we already had.
Now, going back to the point of synergies. These synergies are net of cost. Of course, G&A should be taken into account, but we would give a highlight to the operational part. We have two high-quality technical areas, state-of-the-art technical areas offering many opportunities. These are companies of operations of excellence. We wanna have a company that is even more efficient than they already were. These synergies we identify are within those components.
Of course, all of the other parts are important. Operations is also a highlight among the synergies, but these are only preliminary synergies that we have identified in an initial analysis. We will see the operations in further details as time goes by, and we'll be able to validate and confirm whether the synergy range apply. We feel comfortable sharing this information right now. Excellent. Just one thing that you commented. These synergies are net of cost, then, related to this transaction. The costs to execute the synergies.
Okay, great. Thank you so much, everyone.
Thank you, Vinicius. Our next question comes from Gustavo Mieli, Goldman Sachs. You have the floor.
Good afternoon, Jeane, and Filippo, and Renato . Thank you for the call. I have two questions. First, I'd like to understand how this acquisition will impact the maturing of the new links that you've been operating on. You've been talking a lot about that in recent quarters. Do you think you can use Pardini's structure as a leverage to grow in those links? Now, do you see any internal challenge to ramp up another relevant vertical within the group? Is there any interference, therefore, on the new links coming from this acquisition? That would be my first question.
My second question is: How do payers go into this puzzle? You know, as you ramp up the synergies, you think you're going to share part of these gains with the payers? Do you think that is a possibility? If you have a gain of volume with some relevant partners, do you think that is a possibility? Can you give us your take on the payers and their role in this equation? Thank you very much.
Hi, Gustavo. Thank you for your questions. Well, first I'd like to talk about the global strategy of the Fleury Group that we have been sharing with you for a while now. The first avenue is growth, maintaining the quality of our diagnostic medicine. That's our core business, and it will continue to be our core business.
What we see is an opportunity to offer new products among the different links of this value chain to complete the care journey. The Fleury Group has been positioned for a while, and it's talking about the importance of prevention, early diagnosis, and the aging of the population that leads to an increase in chronic diseases. We've been talking about the importance of diagnosis in all that. This acquisition shows that we've been very coherent with what we're talking about. We want to keep on growing to capture synergies in order to be able to negotiate with operators and other stakeholders. We want to be an increasingly robust company to consider all of the opportunities to expand access to diagnostic medicine in Brazil.
When it comes to the new links in the value chain, our strategy continues because the new links come to complete the care journey of patients offering services that complement what we already do. An example is orthopedics. We already have diagnostics medicine for that, but we're now offering medical appointments and other outpatient procedures because we believe that outpatient clinics offering integrated services that expand access is part of the strategy we have been executing with great discipline. Now answering your question, Gustavo, once you have more service units and more integrated services, this can become an opportunity to offer other services. Using spaces that are idle in the afternoon, for example, to offer appointments or physical therapy sessions, for example. All of that needs to be assessed carefully now that we already have a more complete mapping of the services that will be done.
We've been saying that we wanna grow in the new links in the chain, but that also favors the growth of diagnostic medicine. Throughout time, diagnostic medicine will continue growing. Our work in new links will continue growing as well. In terms of proportion, it's really hard to say. We'll have to do the math. Last year, new links in the dHealth platform represented 104% of the total revenue of the group. In the Q1 , 7%-8% of the revenue of the group. We're going to continue growing, but in different proportions now. When it comes to payers, of course, we have a challenge of the sustainability of the healthcare industry. The Fleury and Pardini Groups have been offering solutions that help in the sustainability of the healthcare industry.
The more diagnostics medicine, preventive medicine, early diagnosis we offer, the lower the cost in the long term. Diagnostics medicine helps with the sustainability approach. Of course, we'll still need to discuss the pass-through of prices and the need to increase efficiency to keep profitability levels when we face high inflation rates. I think that both companies have been working very efficiently. We can look at the 2021 results. In the Fleury Group, we had a growth of 130% with a recurring EBITDA margin of 28.2. Pardini Group had a growth of 32.9% in 2021 and an EBITDA margin of 24.1%. These are companies that are doing their homework to gain efficiency and contribute to the operators. Of course, we wanna be close to them, offering solutions and holding discussions so that together we can all have more customers and a larger addressable market.
That was very clear. Thank you, Jeane.
Thank you, Gustavo. Our next question comes from Leandro Bastos, Citibank.
Good afternoon, Jeane and Filippo. Thank you and congratulations on this transaction. I have two quick questions. The first one, do you have any expectations of tax gains because of the goodwill generated with this operation? The second question, the approval timing. You have the shareholders meeting and then the regulatory approval, but when do you expect this transaction to be closed? Thank you very much.
Thank you for your question. Well, when it comes to tax issues, I think it's too early to say anything about that. Right now, we're focusing on the more operational aspects. Of course, tax issues require a different type of analysis, so that's going to be done in a second stage later on. Right now, we are focusing on the synergies, especially operational synergies. This is all pre-tax. Now about the timing. Of course, that depends on the analysis of the antitrust regulators. If you look at the markets, as Jeane Tsutsui said, we don't have any market in which there is any type of concentration that may be a hindrance.
That's our initial assessment. Of course, that will depend on the regulator's process. We've been gathering information to submit all of the documentation for analysis, but we don't see any major risk, when we look at the combination of businesses of both companies. First, we will go through the general shareholders meeting. After approval by the shareholders, we would expect another 4-5 months.
This is the timeline that we would expect. Of course, this is subject to things that are out of our control. We don't expect to see any type of restriction because of the low concentration of the markets in which both companies operate.
Thank you. Our next question comes from Samuel Alves, BTG Pactual.
Good afternoon, Jeane, Filippo, Renato. I have two questions. The first question is about the capital increase possibility. Can you tell us a bit about the timeline? When will the company make that decision? Is the company management planning to have a proposal for capital increase to the next shareholder meeting? That's my first question. The second question is about leverage. You said that a possible capital increase is very much related to leverage and leverage reduction. What would you consider an optimal leverage level for your organic and inorganic growth plans?
Okay, Samuel. Okay, when it comes to capital increase, as I said earlier, this is a possibility that is associated to the continuity of a strategy that we already had, and we wanna make sure that it is executed. Now, if we look at the number of shares, we don't have capital authorized for the whole amount, so that would require a capital increase. But of course, this is not going to happen before the shareholder meeting. Up until then, we have time to analyze whether this should be capped or not and what would be the conditions associated to that. We had the opportunity to share together with the material facts some of these conditions and how this capital increase would happen if it is approved.
The timing is still something that needs to be decided until the shareholder meeting. We don't need to create any expectations related to that. We will announce this to the market at the right time. Now, when it comes to leverage, we always had leverage space, as you probably remember, within a growth plan, organic and inorganic growth. We had a limit of 3, which is the limit of our debt instruments. Now, with the situation in which we face higher interest rates, we're trying to have a lower leverage, but we can get up to 3x if need be. Considering the current situation in which you have higher rates, we wanna be closer to 1x than 2x. This is not any type of guidance, okay?
I just want to consider what it could be, you know, with the capital gain and the optimal leverage level between 1x and 2x, I'd say. Of course, we'll be disciplined not to create extra burden and to have a more adequate capital structure. I hope I helped.
Yes, you did help. Thank you very much, Filippo. Have a great afternoon.
Of course.
Our next question comes from Mauricio Cepeda, Morgan Stanley.
Hi, Jeane Tsutsui, José Antonio de Almeida Filippo, Renato de Oliveira Braun. Thank you for your time. I have two questions. First, about the commercial synergies and, the complementary portfolio. Do you think you can change your bargaining power with the operators? Because of these synergies, do you think that you can negotiate better with the operators, a better share of gains? Now with the Pardini brand, do you think that this could help you to advance the B2B strategy or the mid-tier strategy? Now about the distribution of the technical areas across the country and your clinical analysis capacity. Now with the merger of your operations, do you think that this is going to change your CapEx profile from now on? Are you planning to have a new technical area in São Paulo? Is this changing your investment plan somehow? Thank you.
Hi, Mauricio Cepeda. Thank you for your questions. Well, the first point about the commercial synergies. Well, once you have a brand portfolio and you act at a national level, this increases your bargaining power. In many aspects, sometimes the operators would like us to be present in certain locations where we currently don't operate, like the Midwest of the country. This combined company will strengthen our bargaining power from the commercial perspective, in our view. The Pardini brand is a very traditional and recognized brand. It has high quality. It focuses on innovation. It's also expanding to offer other services as well. I'd like to draw your attention to the fact that as Fleury Group today here in São Paulo, of course, we have the Fleury brand, and we have a high market share in the premium segment.
We have shared with you that our ambition, even before this transaction, is to strengthen our presence in the intermediate segment, and we also want to advance in the basic segment with the right model. When we look at our operation in some states, we see that our rating is much higher because depending on the location, you don't have that distinction between the different segments. I have no doubts that the Pardini Group today focuses mainly on lab to lab, and that is a different model. There is no operator involved. You negotiate directly with labs, and they have a wide range of operations going from the premium to other levels. Complementarity, once again, is a very important aspect. Now about the technical areas and investments, you're right.
We've been making investments, and we are preparing our technical area here in São Paulo with the Polaris project, as you know. This is an investment that makes perfect sense for us because this is going to greatly increase our processing capacity. As a reminder, here in São Paulo, in addition to the routine automation tasks, we have many specialized services, such as mass spectrometry. Now, with this business combination, we have the possibility of processing more tests in our technical area located in Jabaquara. Why? Because part of these tests today may be sent elsewhere to be processed, and now we'll be able to process that in our technical area in Jabaquara. Also, we have fantastic automation and efficiency. We think that this can become a hub in some regions where that was not very strong.
In our view, yes, we're going to assess the possibility of making those investments. When we go into a hospital, we'll see whether we need to build a new technical area or if with the 24 existing technical areas we have, we may see the possibility of having a more balanced technical investment. I would like to emphasize, Vespasiano and Polaris today complement each other, and we're going to leverage processing in these two large technical areas.
Thank you very much.
Thank you, Cepeda. Our next question is by Javier Martínez from Morgan Stanley.
Hi, good afternoon. Thank you for taking my question. Bradesco now will have 20% stake in the new company, but they're also a client, right? I'd like to understand how this is going to work. What is the rule of the game? What is the relationship between the parties, and what is the governance like? How much does Bradesco represent in the combined company and the family and the doctors, do they have some type of agreement with Bradesco? Do they plan to have some type of future combination or not? And what was the criteria used for the Pardini family member percentages?
Thank you, Javier. I will start, and then Filippo will add to my answer. Bradesco is our reference shareholders. They are part of our board of directors. The board members define the strategic direction. Since last year, we've been talking about our growth ambition at the Fleury Group. We have a great alignment at our board, and we have a very strong vision of building the future of healthcare in Brazil.
Bradesco, as an insurance company, is part of this group of the largest payers for Fleury. Bradesco is definitely among the largest payers, and it will continue to be. Bradesco will reduce their stake in this combined company from almost 30 to 20%. We now have a participation of the Pardini siblings. Victor, Regina, and Hermes Pardini will be considered individually from now on. There is no agreement of the Pardini siblings as a block. They will be taken individually from now on, and they will participate in the governance considering their stake. We have 10 board members. We can get up to 11, but for now, we'll continue with 10 board members. 6 of them come from the reference block, so doctors and Bradesco. We'll continue to have like that.
We'll continue to have six board members among doctors and Bradesco shareholders. Every sibling will be a new board member, and they will contribute with their expertise, their know-how in building a company that has gained efficiency as time went by. It was founded by doctors. It always focused on high quality access, and it has a great cultural fit to what the Fleury Group also developed throughout time. Yes, there are a few equity issues here between family, Bradesco and doctors, but these are routine issues in this type of deal. Now I'd like to turn the floor over to Filippo.
Javier, you talked about the 14%. I think you're doing the math comparing to the VWAP of 30 days.
No, you're right. 14% when the market closed yesterday, you're right.
Yes, as you said, this reflects negotiations in which the parties assess the size of each company and this merger and look into the potential gains of this business combination, creating a more robust company that is more competitive in the market. The combination of strategic factors is what defines this. Now, I was doing the math. 14% when the market closed yesterday. Now, another math that some people is doing is comparing to the VWAP of 30 days, and that would be 6%. These are different views for the same issue. Yes, that reflects the negotiations and the opportunities of both companies to generate value through this business combination.
Okay, got it. Just to clarify, the family members and the doctors don't have any type of agreement for a future combination with Bradesco?
No, there is no specific agreement. There is an agreement regarding a few rights, but they are all considered individually.
Perfect. Thank you very much.
Our next question comes from Estela Strano, J.P. Morgan.
Good afternoon, everyone. Thank you for your presentation. We have two questions here. First is: What are the monetary adjustments in Fleury's cash position after the M&A? The second question: What is the company's M&A strategy from now on? Will you continue looking outside, or are you going to focus on the integration now?
Hi, Estela. Let me see if I understand your question about the monetary adjustment. The cash installment will be paid right after the close of the operations. There is a correction on CDI, and it's paid right after the closing of the operation. Now, about our M&A strategy, as we said in the presentation, both companies have a track record of great M&As.
We see some smaller M&A opportunities. It's not easy to go through operations like that. It requires a lot of time and negotiation, but both companies will keep their strategies. Until the closing of the operation, each company will operate the way they always did independently. After the closing of the operation, we will start working together. The growth of the group and the combined company will go through an organic and inorganic growth. That's what we see for our future. We're going to increase the robustness of the new company, and there is the possibility of a capital gain to reinforce our capital structure so that we can continue executing our strategy.
Okay, thank you.
Our next question is by Ricardo Boiati, Banco Safra.
Hi, everyone. Good afternoon. I just want you to clarify something regarding governance. Today you have a shareholders agreement between Bradesco doctors and the Pardini siblings are now going into this agreement as individual shareholders. Is that right?
Yes. Today we have a shareholders agreement between the group of doctors, Fleury and Bradesco. That agreement has been in force for some time now. Now each of the Pardini siblings individually will continue without any type of associations with third parties, partner physicians or Bradesco. They will not go into this shareholder agreement that already existed, but the agreement continues between the group of doctors and Bradesco. There is an equity agreement and some specific clauses that are common to this type of clause will be enforced, such as the right to a first offer and things like that. These are general clauses. Today, the Pardini siblings continue as shareholders, and they have 7.3% of the combined company shares, but they will be taken individually.
Okay, thank you very much.
Now a question by Fred Mendes, Bank of America.
Thank you. Good afternoon, everyone. I have two questions here. About the capital increase. Regardless of how this happens, this should not affect the board. At the end of the day, Bradesco plus doctors will have six seats, regardless of what happens with the capital increase, right? Now, the second question, we're talking about BRL 1 billion cash that will be coming in in addition to your capacity to leverage. So that would be a very high amount.
Now, considering the integration of Pardini, Saúde Digital and other topics, how are you going to deal with all of that and balance all of those plates at the same time, considering that in a possible capital increase will continue with your maybe not as aggressive M&A agenda, but with a very strong firepower considering the current scenario?
Thank you, Fred. About your first question regarding governance, we see 70.6 million shares increasing. Now, the board composition doesn't change. We have 6 seats for doctors plus Bradesco, 3 seats, 1 seat for each of the Pardini siblings, and a maximum of 3 seats there. The capital increase will not affect this relationship, either in the cash installment or the share payout.
Once again, we're going to assess this possible capital increase in the context that you defined yourself around BRL 1 million to reduce our leverage level, but also and mainly because of the expansion agenda that we have, both organic and inorganic expansion. We already have an M&A team well-structured to look at a portfolio that makes sense considering our strategic ambition. Considering the macroeconomic situation right now, we have good opportunities. The prices are adequate right now. We've been talking about discipline and assessment. We go through all of the governance rights, so we will be very disciplined and careful to make the best decisions in terms of capital allocation and the best decisions also to balance the financial cost and a view of maintaining our long-term strategy. I just want to mention that this possibility is considered within this context that Filippo mentioned.
This was already being discussed considering the hiking interest rates, an adequate pipeline. A consistent strategy and execution discipline. Now, about the other aspect that you mentioned, Fred. Of course, when you have a business combination, you may have a concern. Now we're going to go into a mapping period. We may be more consistent in estimating initial synergies, of course, but the Pardini Group has a very robust operation with a discipline and competent management that has been delivering good results, and the Pardini brand will be maintained. They have their own expansion strategy. Of course, we need to map out the synergy opportunities, but the operations are running, and we don't want to change anything or impact anything that is running well, that is working well.
Of course, after the closing, we'll have further details about the synergies, but in a certain way, we are already showing a discipline in terms of the capacity to keep on with our operations running. We'll capture all the synergies, and at the same time, we're going to continue building our future. This is not going to be a distraction from our strategy. Thank you, Fred.
Perfect, Jeane. That was very clear. If I may ask another question. Now, I think I know it's early, but the integration roadmap after this is approved, then you're going to start working as one single company or do you think it makes sense to continue working as separate companies for a certain period of time because of leadership, maybe a new stock option plan, depending on what happens? I know it's still early, but what is your initial take on that?
Yeah. Thank you, Fred. Well, the first thing is that it's still early to say anything about that. This is going to be structured carefully from now on. I want to draw your attention to the exceptional work that Pardini has been doing. Our vision, I mean, we look up at the great work they do. We admire what they do. These two companies have shown how consistent and how robust they are in terms of their growth and profitability. We have two very mature management teams, and this needs to be maintained, the brands will be maintained, and the businesses will be maintained. Fleury now is very much focused on B2C. Pardini is a great reference in B2B. There are lessons learned from both companies that are now combining their businesses.
This is a very important aspect, and of course, we'll give you more details when we have them, Fred. Because these analyses have not been conducted yet. This is a type of work that we'll start now. We're just announcing the deal now, and the journey is just starting. Of course, we'll have opportunities to share further information with you later on.
Sure. Thank you, Jeane. That was very clear.
Thank you, Fred.
We'll continue now with Vinicius Ribeiro from UBS.
Hi, good afternoon. Thank you for taking my question. I have two questions here. First, about the lab-to-lab. This is a segment that in which Fleury has not operated as much as the Pardini Group. So once the operation is approved, are you planning to change your strategy when it comes to that?
Because there was a moment of a lot of competition in the past, but then that changed more recently. Now a more specific point. Can you tell us about a ten-year maintenance of the Pardini brand? Does that apply to all the Pardini brands or only Pardini? You know, all of the 12 brands they have, or are you planning to phase out some of these brands, in the future?
Thank you for your question. When it comes to lab-to-lab, yes, Fleury does operate in lab-to-lab, but we focus more on esoteric tests. We collect samples throughout Brazil, but we don't have a very efficient logistics because our volume is not very large. Now, Pardini is a major reference in lab-to-lab.
They have a huge volume with a very efficient logistics network and a capacity to integrate with partner labs that is incredible. We have an opportunity to optimize here. We can take part of the differentiated portfolio that Fleury has, because Fleury already has a portfolio, but there are some tests that we still have that we could offer in this logistics network that already carries samples. Now, another aspect is that. Once you start with an offer that has this whole integration, taking the integrated results so that we don't have another cost of integration. Because today I have two costs. If the lab wants to hire services or tasks from both Pardini and Fleury, you have a cost of integrating with Pardini and a cost of integrating with Fleury. This can be optimized.
Our lab-to-lab revenue share is very small today, 1%-2%, and Pardini's share in lab-to-lab revenue is 56%. Now, when it comes to the brand strategy, we learned a lot throughout time. Marcelo Magalhães brand will be kept, will continue. This is a brand that has almost 60 years in Recife. In the past, we made a few mistakes when it comes to maintaining brands, but we learned that the local relationships with customers and with doctors and branding is extremely powerful. In our view today, we wanna keep the brands because there is a very strong relationship there. Of course, in the material fact announcement, we talked about brand maintenance because that's an important point. We don't plan to change any brand. That is actually a great asset.
We're talking about recognized brands that we have always admired. We are announcing the deal today. We're very happy about this deal. This conversation, considering the convergence of vision, of culture, of valuing diagnostic medicine, which defines 70% of the medical decisions, a view that diagnostic medicine will always be key in healthcare, is a vision that is shared by both companies, and it's always been like that. It's natural that the brands are kept, and mainly that the brands are valued and that they grow with their own strategies. Thank you, Vinicius.
Thank you, Jeane. Congratulations to everyone. I know that this operation is under negotiation. It's been under negotiation for a very long time, so congratulations now.
Our next question is by Arthur Alves, Santander.
Hi, good morning, everyone. Jeane, José Filippo, Renato. I have just a quick question. I know that you haven't given us an exact timeline of the synergies, but do you have any idea of time after the closing? I just wanted to hear a bit more about that, please.
Hi, Arthur. Thank you for your question. I just wanna say that we feel very comfortable about indicating those synergies, but I wanna emphasize that this is a preliminary assessment. In terms of timeline, after three years, we expect to be at a run rate level. That's a good estimate, I'd say. All of that will be assessed later. Right now, considering that this is a preliminary assessment, we should adjust our expectations. Once the operation is approved and we start operating, maybe in three years' time, we'll be at a level in which all synergies are at a run rate level. That's our expectation.
Thank you very much. As a reminder, if you want to ask your question, please dial star one. To remove yourself from the queue, please dial star two. Please wait. If there are no further questions, I would like to turn the floor over to the speakers for their final remarks.
I would like to thank you all for joining us for this conference call. I just want to emphasize how happy we are. We're celebrating this business merger that makes perfect sense for us. As Vinicius said, we would always receive questions about whether it would make sense to combine the businesses of Fleury and Pardini, and we're very happy to announce this combination today. These are companies with similar histories, and mainly we're looking ahead to continue our legacy.
We'll have over 20,000 employees, more than 4,000 doctors, an amazing intellectual capacity to build the future of healthcare in Brazil and to have a more accessible, more integrated, and more sustainable system. Thank you very much.
Thank you. This concludes Fleury Group's conference call. Thank you very much for joining, and have a good afternoon.