WELLINGTON: Infratil Limited (NZE: IFT) has executed a conditional agreement to acquire between 50.1% and 60% of Pacific Radiology Group Limited from existing shareholders, for total consideration of up to NZ$350 million, a news release said
The acquisition was conditional on counterparty consents to change of control in relation to a small number of material contracts, and those consents have now been received.
Infratil confirms that the Pacific Radiology acquisition is now unconditional. Completion of the acquisition is expected to occur on 31 May 2021.
Infratil now expects that its ownership stake in Pacific Radiology will be between 53.5% and 58.5%, for total consideration of approximately NZ$312 million to NZ$344 million.
Infratil’s final ownership stake and total consideration will depend on usual completion adjustments and confirmation of doctor and manager shareholdings.
Upon completion, the existing Doctor shareholders and Management will hold between 40% and 49.9% of Pacific Radiology. As the majority investor, Infratil will have governance rights consistent with its shareholding and, together with the doctor shareholders, will be able to drive the continued development and growth of the business.
The acquisition Enterprise Value of NZ$867 million implies an EV/EBITDA multiple of 12.6-13.3x and is subject to usual completion adjustments for net debt, net working capital and capital expenditure.
Infratil CEO Jason Boyes said, “the Pacific Radiology acquisition, if completed, sits well with Infratil’s other high performing, high quality assets, and builds on its investment last year in Qscan Group, a leading diagnostic imaging business in Australia”.
“When we outlined the company’s strategic direction in February, healthcare was identified as a sector of considerable opportunity”.
“Diagnostic imaging is an essential services industry, offering a combination of defensive characteristics and structural long-term growth. Pacific Radiology is New Zealand’s largest private provider of diagnostic imaging and has a proven track record for delivering long-term growth, both organically and via acquisition”.
“We also see this as an opportunity to scale Infratil’s investment in Qscan Group and create a meaningful Australasian healthcare platform with potential synergies and adjacent opportunities”.
“The purchase also confirms our continuing confidence in the New Zealand market and the thematics which are driving our capital allocation in communications and digital infrastructure, decarbonisation, and aging populations”.
Chairman of Pacific Radiology Group, Dr Adrian Balasingam, said: “The Doctor shareholders in Pacific Radiology are delighted to partner with such a capable long term investor as Infratil, who will add real value as Pacific Radiology continues to grow and expand our high quality services to patients, referrers and funders across New Zealand.”
Infratil Limited (NZE: IFT) share price
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13 May, 2:14 pm GMT+12 ·
https://infratil.com/