Retirement village operator Arvida is to acquire three villages – Mary Doyle Lifecare, Strathallan Lifecare and 50% of Village at the Park Lifecare – from Hurst Lifecare for approximately NZ$106 million (US$76.7 million).
“Meaningful brownfield development at Village at the Park and Mary Doyle includes 110 consented new units in the pipeline” said Bill McDonald, CEO of Arvida. “The new units will be progressively developed over the next four years and include developments nearing completion”.
The acquisitions will increase the number of Arvida villages to 29 comprising a mix of 1,761 care beds and 1,752 retirement units. And based on Arvida’s estimates of earnings, the acquisitions will add NZ$9 million of underlying profit on a pro forma FY18 basis and be 8% accretive to underlying earnings per share.
The acquisitions and transaction costs are to be funded through a combination of new equity and debt. The majority, or NZ$77 million of new equity is to be raised by way a 1-for-5 pro-rata renounceable rights issue at NZ$1.15 per share. The offer has been fully underwritten by Forsyth Barr. Of the remainder, NZ$16 million shares will be issued to vendors (escrowed for twelve months); and the remaining NZ$16 million from bank debt. Arvida said that this left headroom for further acquisitions and brownfield development.
Completion is expected mid October.
