Monday 11th October 2021
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Radius Care is pleased to announce the acquisition of Clare House, an integrated care facility and retirement village in Waikiwi, Invercargill with 69 care beds and 25 ORA units. The acquisition includes all the land, buildings and operations of Clare House as well as two adjoining residential properties at 71 and 83 Durham Street.
The purchase price is $14.5m being a 3% discount to the independent valuation performed by Colliers and will settle on 1 November 2021.
Based on the pro forma projected earnings from the Colliers valuation, the acquisition will immediately add $1.7m to pre-IFRS16 Underlying EBITDA (including $0.6m from village resales1). Colliers valued the care facility at $9.0m (implying an undiscounted acquisition multiple for the care facility of 7.8x) and used a discount rate of 15% on the retirement village valuation.
The acquisition will generate AFFO of ~$0.8m which represents strong mid-teens AFFO accretion based on full debt financing of the transaction. Radius Care’s dividend policy of targeting a payout ratio of 50 to 70% of full financial year AFFO, remains unchanged.
The acquisition will be fully funded from the new ASB facility with post settlement net debt / proforma pre-IFRS16 Underlying EBITDA remaining below 2.0x. Capacity remains in cash and the ASB facility to fund the previously communicated brownfield developments and settle the Northwood acquisition.
Further earnings growth beyond FY22 of ~$0.5m pre-IFRS16 Underlying EBITDA is anticipated from the scale advantages of integrating Clare House into the group.
Executive Chairman Brien Cree commented “I’m really excited about the Clare House acquisition, it’s an excellent facility with a culture consistent with Radius. It expands our regional footprint and helps create a solid infrastructure for growth. We now extend from Invercargill in the South to the Bay of Islands in the North. Our continued expansion remains the focus for our team.”
Please see the link below for details
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