Residential aged care provider & retirement village operator Oceania Healthcare Ltd’s shares traded in a range from the 79c issue price up to 83c on Friday, their first day on the NZX. They also listed on the ASX.
The indicative price range for last month’s bookbuild was 76-104c/share.
Oceania, backed by Australian bank Macquarie Group Ltd and built up by chief executive Earl Gasparich to become New Zealand’s third largest aged care provider & 6th largest retirement village operator, raised $200 million through its initial public offering. The company issued 253.2 million new shares, equating to 41.5% of the total shares in the company at listing.
Based on the 79c issue price, the company had an implied market capitalisation on listing of $482.1 million and implied enterprise value of $585.3 million.
Oceania chair Liz Coutts said yesterday: “The IPO gives Oceania Healthcare the ability to accelerate its substantial development programme through the reduction of debt and also providing financial flexibility to acquire further suitable development sites as opportunities arise.”
Macquarie involved for 12 years
Macquarie invested in this business from 2005-2008, when Eldercare NZ Ltd & QualCare merged to form Oceania. Macquarie will hold 60.3% after listing and is in an escrow arrangement to hold its stake until the day after the results for the May 2018 financial year are announced. Escrow arrangements affecting chief executive Earl Gasparich & other senior executives run until either the 2017 or 2018 financial results are announced.
The company will be the freehold owner of 47 of its 50 sites – 48 aged-care & retirement village facilities (one in the advanced stages of closure for redevelopment) & 2 sites held for redevelopment.
It proposes to use $173.4 million of the $200 million capital-raising to reduce debt to provide additional flexibility to pursue development projects, including starting the above-ground works at the waterfront Maureen Plowman village in Browns Bay and starting stage 4 of the Meadowbank village (pictured above).
The company proposes to take 354 carebeds & 59 units out of commission, and develop 636 care suites & 1038 units, taking its totals after this development programme to 2284 carebeds, 877 care suites & 2050 units, increasing total places from 3950 to 5211.
Of the gross development pipeline of 1674 new residences (1261 net of decommissions), over 900 are consented or under construction.
The target medium-term build rate is 200 units (150 net of decommissions).
2 April 2017: Oceania Healthcare heads towards 5 May listing
Attribution: Company release, product disclosure statement.