The board of listed aged care provider Japara Healthcare has unanimously recommended shareholders accept the acquisition proposal from not-for-profit aged care, retirement living and hospital provider Calvary.
If approved, Calvary will acquire 100 per cent of Japara’s shares at $1.40 each via a Scheme of Arrangement that implies an equity value of approximately $380 million and an enterprise value of approximately $588 million.
The proposal is up from Calvary’s initial and revised offers of $1.04 and $1.20 per share in late April and early June respectively, and fellow aged care provider Bolton Clarke’s offer of $1.22 per share in mid-June.
Japara has over 50 aged care and retirement living communities across Victoria, New South Wales, South Australia, Queensland and Tasmania. Calvary has 17 aged care and retirement living facilities, 14 public and private hospitals and 22 community care centres across NSW, the ACT, SA, Victoria, Tasmania and the Northern Territory.
The Japara board announced in statement on 27 July that it unanimously recommended that shareholders vote in favour of the scheme in the absence of a superior proposal and subject to an independent expert agreeing it was fair and in the best interests of Japara shareholders.
Japara chairman Linda Bardo Nicholls said the board considered a number of alternatives including a competing proposal and standalone value creation from its existing strategy.
“After careful consideration of the future opportunities for Japara, along with sector and regulatory uncertainty, and execution risks, the board has determined that the scheme delivers compelling value to Japara shareholders,” Ms Bardo said in a statement.
The Calvary deal is subject to Japara shareholders’ approval at a meeting expected to take place in October 2021.
Calvary National CEO Martin Bowles said the recommendation was very encouraging and another step to further establish an integrated care model across residential, community and hospital services.
“Calvary is in an exciting phase of growth which includes playing our part in the future delivery of health, aged and community care services across Australia,” Mr Bowles said in a statement.
“Growing our aged care portfolio will enable us to better serve the people for whom we already care, offer support to more people and be present with people in the times when they are most vulnerable.
“We look forward to working with the Japara team to combine the best of both organisations for the ultimate benefit of those in our care.”
Japara said a booklet with information on the scheme, reasons for the recommendation and independent expert’s report will be sent to shareholders in September 2021.