Afya Maps Yduqs Merger, BRL 2.2B Synergies and Digital Health Growth at Investor Day

Afya NASDAQ: AFYA outlined its strategy for expanding its healthcare education and digital-services ecosystem at its 2026 Afya Day, with executives emphasizing a proposed merger with Yduqs, planned synergy capture, shareholder returns and new growth avenues in medical education and physician-focused technology.

Chief Executive Officer Virgílio Gibbon said the company has expanded significantly since its 2019 initial public offering. He said Afya grew from operations in seven states to more than 20 states, increased medical seats from about 1,200 to approximately 3,800, and lifted revenue from BRL 670 million to nearly BRL 3.8 billion. The company also reported adjusted EBITDA growth from about BRL 300 million to BRL 1.7 billion.

Gibbon said Afya has made 21 acquisitions since its IPO and has sought to combine growth with academic quality, infrastructure investment and social impact. He said the company has obtained nine CIIM accreditations, invested more than BRL 100 million in physical infrastructure over the prior 12 months, and produced 4,500 scientific papers, more than 90% of them in the medical field.

Proposed Yduqs combination

The proposed business combination with Yduqs was the central focus of the event. Gibbon said a combined company would have approximately BRL 10 billion in revenue, 38,000 medical students and about BRL 1.2 billion in free cash flow to equity. He said the company intends to distribute 50% of that cash generation to shareholders.

Management identified four major growth opportunities from the transaction: expanding Afya’s healthcare portfolio, broadening the Ibmec brand into underserved regions, increasing hybrid and on-site higher-education offerings, and expanding the pool of potential acquisition targets.

Gibbon said the combination would also create opportunities to expand healthcare education in smaller and midsize cities, use existing facilities for lifelong learning programs, and offer Afya’s digital medical-practice solutions to a broader audience of students and doctors.

The transaction remains subject to approvals from both companies’ boards and Brazil’s antitrust authority, CADE. Denis Del Bianco, Afya’s continuing education vice president and designated integration officer, said the companies expect the antitrust review to take roughly nine to 11 months after board approvals, potentially concluding between June and August.

During that period, the companies will continue operating independently and as competitors, Del Bianco said. A dedicated “clean team” of 12 to 13 executives will plan the integration while complying with restrictions on sharing sensitive data. Its work will cover a master implementation plan, synergy capture, organizational design, talent retention, academic architecture and information-technology systems.

Afya estimated BRL 2.2 billion in expense, cost and capital-expenditure synergies, with 80% expected to be captured within three years. Gibbon said the estimate was developed with support from an international consulting firm and reviewed by senior executives from both organizations.

Capital allocation and shareholder returns

Chief Financial Officer Luis André Blanco said Afya has delivered revenue and EBITDA compound annual growth rates of 21% and 22%, respectively, from 2021 through 2026. He said the company has returned BRL 1.1 billion to shareholders through dividends and share repurchases while completing acquisitions totaling BRL 3.2 billion.

Blanco said Afya has returned 36% of free cash flow to equity to shareholders since 2021 and ended the second quarter with net leverage of 0.8 times EBITDA. He said the company decides between dividends and buybacks based in part on its assessment of the share price and its leverage position.

The company has completed 22 M&A transactions since its IPO, including 11 in undergraduate education that represented BRL 4.1 billion in transaction value and nearly 22,000 seats purchased, Blanco said. He said the proposed Yduqs transaction would add roughly 2,100 medical seats and carry an estimated post-synergy valuation multiple of 2.7 times EBITDA, if approved.

Blanco also said Yduqs would expand Afya’s potential medical-education acquisition pipeline from 89 companies with 12,000 medical seats to 135 companies with 21,000 seats. He said the combination could increase trading liquidity and potentially support continued inclusion in major Brazilian equity indexes.

Digital services and physician engagement

Vice President of Innovation and Digital Services Lélio de Souza Junior said Afya reaches 80% of Brazil’s physicians through its ecosystem, with 508,000 registered doctors and nearly 300,000 monthly active users across its solutions.

He said the company is investing in technology to unify physician registrations, logins and data across its businesses. The objective is to increase the volume, frequency and depth of physician engagement, while creating scalable monetization opportunities with pharmaceutical companies and other business-to-business customers.

Afya’s Whitebook clinical-decision platform has more than 400,000 registered physicians and processes 32 million searches annually, according to Souza Junior. Its generative-AI feature has more than 100,000 users. The company’s iClinic platform has more than 50,000 active subscribers and handles more than 3 million patient consultations per month.

Company representatives described how Whitebook search data can be used to identify potential disease trends. In one example, Afya observed increased searches related to measles in São Paulo, validated the signal with its clinical team and sent updated information to more than 70,000 pediatricians, general practitioners and infectious-disease specialists.

Souza Junior said business-to-business revenue from pharmaceutical-industry initiatives is expected to rise 40% year over year, though it remains a small portion of total company revenue. He said Afya is also exploring engagement opportunities with hospitals, laboratories, financial-services providers and other sectors seeking access to its physician audience.

About Afya (NASDAQ:AFYA)

Afya Limited is a medical education and digital health company focused on Brazil. Through its educational platform, the company provides undergraduate medical education, medical residency preparation, specialization and continuing medical education programs, and other learning resources for students and physicians.

Afya also offers digital products and services intended to support healthcare professionals throughout their careers. These include clinical content, study tools, telemedicine and practice-management solutions, and subscription-based applications designed to assist physicians with education, clinical decision-making, and patient care.

The company has expanded through the development and acquisition of medical schools, education businesses, and health technology platforms serving different stages of the medical professional lifecycle.

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