SYDNEY, AUSTRALIA: Bain Capital, a global private equity firm, has agreed to acquire Estia Health, a leading Australian aged care provider, for $838 million in cash. The deal was announced on Monday by Estia Health, which said it had entered into a scheme implementation agreement with Bain Capital.

Under the terms of the agreement, Estia Health shareholders will receive $3.20 per share, reduced by the amount of any permitted dividends paid. The offer represents a 50% premium to Estia Health’s closing share price of $2.14 on March 21, 2023, before Bain Capital’s proposal was made public.

Estia Health is permitted to pay fully franked dividends of up to $0.12 per share, which would enable eligible shareholders to receive up to $0.05 per share in additional benefit from franking credits.

The board of directors of Estia Health unanimously recommended that shareholders vote in favour of the scheme, in the absence of a superior proposal and subject to an independent expert concluding that the scheme is in the best interests of Estia Health shareholders.

The scheme is subject to various conditions, including approval by Estia Health shareholders at a scheme meeting expected to be held in November 2023, and court approval. The scheme booklet containing an independent expert’s report will be provided to shareholders ahead of the scheme meeting. The implementation of the scheme is expected to occur before the end of 2023.

Estia Health operates 70 aged care facilities across Australia, with more than 6,500 places and over 7,000 staff. The company provides residential care, respite care, dementia care and palliative care services.

Bain Capital is one of the world’s leading private investment firms, with more than $130 billion in assets under management. Bain Capital has a track record of investing in and growing businesses in various sectors, including healthcare, consumer, technology and industrials. Bain Capital also owns Virgin Australia, the country’s second-largest airline, which it acquired in 2020.

Bain Capital said it was attracted by Estia Health’s strong market position, quality assets and experienced management team. Bain Capital said it would support Estia Health’s growth strategy and invest in its operations, technology and people.

Estia Health chairman Gary Weiss said the deal was an attractive outcome for Estia Health shareholders, who would receive a significant premium for their shares and certainty of value. He also said the deal would benefit Estia Health’s residents, families and employees, as Bain Capital would provide financial and operational support to enhance the quality of care and services.

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