Sharechat Logo

Metlifecare to buy Vision Senior Living and Private Life Care for $216M

Monday 7th May 2012

Text too small?

Metlifecare, which raised $45.5 million of new capital last year, has agreed to buy rivals Vision Senior Living (VSL) and Private Life Care Holdings (PLC) in a deal worth some $216 million in stock and cash.

The retirement village operator will buy VSL's five existing villages for $83 million in Metlifecare shares, and PLC's three villages for $123 million for scrip, the company said in a statement. VSL's shareholders will also buy 4.2 million further shares for some $10 million in cash to pay down the retirement village operator's debt.

"The merger will strengthen Metlifecare's presence in the key Auckland retirement village market and ensure that the company continues to compete strongly in the New Zealand retirement village sector," managing director Alan Edwards said. "The merger will be immediately cash flow accretive and will provide an enhanced platform for Metlifecare to drive growth and shareholder value."

In February, Metlifecare reported a 38 percent slump in first-half underlying profit as it had to pay rising insurance costs and had to contend with smaller operating revenue after selling its Merivale Village last year.

The merger will boost Metlifecare's portfolio to 24 villages, three of which are in development. The number of units will increase to 3,902 from 2,460, while brownfield and greenfield capacity climbs to 1,011 units from 380 units.

Metlifecare's biggest shareholder, Retirement Village Group, owns 100 percent of PLC, and has committed to sell 16.5 million shares to retail investors to take its stake below 50 percent. It won't be allowed to reduce its stake below 35 percent within 12 months.

VSL private equity shareholders Goldman Sachs and Arrow International, who hold about 68 percent of the village operator and developer, will be allowed to distribute shares in-specie after six months, while minority investors won't be allowed to sell for 12 months.

The deal comes after Retirement Village Group sold down its stake in Metlifecare last year, and ends speculation VSL would float independently on the stock exchange.

The transaction is expected to settle in July, and needs Overseas Investment Office approval, minority shareholder sign-off and certain third party consents.

A special meeting will be held in Auckland next month. RVG will be excluded from the vote because it's a related party transaction.

Metlifecare's board will increase the ratio of independent directors, adding two unrelated parties by the end of the year.

Northington Partners will provide an independent adviser's report on the merger, while Grant Samuel & Associates provided Metlifecare with advice on the deal. Chapman Tripp gave the company legal advice.

The company's stock fell 1.8 percent to $2.20 in trading on Friday.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

UPDATE: Metlifecare shares fall 4.8% as posts drop as first-half profit falls 66%
Transpower seeks up to $125 mln in new bond ahead of November maturity
Metlifecare investigates building problems with Auckland Links Apartment complex
Resource Consent for new Glenfield Village for Metlifecare
Metlifecare undervalued compared with peers, Devon's Glass says
Metlifecare turned to a profit in 2013 after merger boosted property portfolio
Metlifecare raises $70 mln at 8.3 % discount in institutional placement
Metlifecare to raise $80M via placement, share purchase plan to repay debt
Metlifecare on track for $60M full-year post-merger cashflows
Metlifecare sells Nelson village for $29 million