Arvida Group Limited is to purchase three more retirement villages for some $160 million.
The acquisition of Mary Doyle Lifecare, Strathallan Lifecare and 50 per cent of Village at the Park Lifecare will increase the number of Arvida villages to 29, comprising a mix of 1,761 care beds and 1,752 retirement units.
Based on Arvida’s estimates of earnings, the acquisitions will add $9m of underlying profit on a pro forma FY18 basis and be 8 per cent accretive to underlying earnings per share.
Further earnings are expected beyond FY18 from future developments at Village at the Park and Mary Doyle.
“Meaningful brownfield development at Village at the Park and Mary Doyle includes 110 consented new units in the pipeline” says Arvida CEO Bill McDonald.
“The new units will be progressively developed over the next four years and include developments nearing completion.”
The villages are being acquired from Hurst Lifecare and associated parties which previously sold Rhodes on Cashmere to Arvida as part of the IPO.
The vendors have elected to receive a significant portion of the purchase price in Arvida shares at market price.
Interests related to Hurst Lifecare remain holders of shares issued at the IPO.
The acquisitions and transaction costs are to be funded through a combination of new equity and debt:
- $77m of new equity to be raised by way a 1-for-5 pro-rata renounceable rights issue (“Offer”) at an issue price of $1.15 per share. The offer has been fully underwritten by Forsyth Barr Group Limited;
- $16m of shares issued to vendors escrowed for twelve months; and
- $16m of bank debt comprising $10m of debt acquired in conjunction with Village at the Park and $6m from existing facilities leaving headroom for further acquisitions and brownfield development activity.
Completion of the acquisitions is anticipated mid-October on receipt of customary third-party approvals.
Arvida Group Limited (Arvida) is a listed retirement village group with an emphasis on providing a continuum of care from independent living through to high-quality aged care services.
The company currently has 26 villages across New Zealand comprising: Aria Bay, Aria Gardens and Aria Park, Auckland; Copper Crest and Views, Tauranga; Cascades, Hamilton; Lauriston Park, Cambridge; Glenbrae, Rotorua; Molly Ryan, New Plymouth; Lansdowne Park, Masterton; Olive Tree, Palmerston North; Waikanae Lodge, Waikanae; Oakwoods and The Wood, Nelson; Ashwood, Blenheim; Ilam, The Maples, Mayfair, Park Lane, Rhodes on Cashmere, St Albans, St Allisa and Wendover, Christchurch; and Bainlea House, Bainswood House and Bainswood on Victoria, Rangiora.