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Private equity giant Bain Capital has snapped up aged care operator Estia Health in a takeover deal worth $838 million which will leave just one major aged care provider left listed on the ASX.
Bain, which also owns Virgin Australia, has been in pursuit of Estia since March, when it lobbed a bid to buy the company’s shares at $3 each.
The company’s board is unanimously recommending the deal, saying it’s a good outcome for shareholders to cash out at a level above where shares have been trading.Credit: Justin McManus
Estia confirmed to shareholders on Monday morning that it had signed an agreement under which Bain will pay $3.20 per share for the company, which is a 50 per cent premium on where shares were trading prior to the private equity firm making a bid for the company in March.
The company’s board is unanimously recommending the deal, saying it is a good outcome for shareholders to cash out at a level above where shares have been trading.
“The Estia Health board is confident as to the outlook for the business, however, recognises that the scheme allows shareholders to realise certain cash value now at an attractive premium,” Estia Health chair Dr Gary Weiss said.
Sydney-based partner at Bain Capital, Mike Murphy, said Bain expected to have a long-term presence in the aged care sector.
“We appreciate the trust families have placed in Estia Health to care for their loved ones. Bain Capital will support management to continue to build on their track record of delivering highly compliant, high quality, and compassionate residential aged care to thousands of Australians.”
Estia investors have had plenty of share price volatility over the past three years as the aged care sector faced the COVID-19 pandemic and rising infections within residential care facilities. The stock went as low at $1.10 in March 2020.
But there has been plenty of investor interest in the healthcare space and aged care in particular as the industry has adjusted to the post-pandemic environment.
Estia operates more than 70 aged care homes in SA, VIC, NSW and QLD. The company said it cares for 8000 residents a year.
Not-for-profit Catholic healthcare operator Calvary bought fellow aged care operator Japara for $380 million in late 2021.
Fertility treatments operator Virtus Health was the subject of a fierce bidding war between BGH Capital and CapVest Partners, which was won by BGH in 2022.
Estia Health’s sale to Bain will leave Regis Healthcare as the last ASX-listed company focused on aged care. Regis shares opened up by more than 2 per cent to touch highs of $2.32.
Estia shares spiked on the takeover news. They are 9 per cent higher at $3.10 just after midday.
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