Quadrant exits Summerset, buys Estia Health
Quadrant Private Equity has fully exited New Zealand retirement village operator Summerset via the public market, generating an estimated return multiple of more than 3.7x. In the same week, it acquired a majority stake in Australian aged-care operator Estia Health.
The GP sold its remaining 50 million shares in Summerset - a 23.16% equity stake - for NZ$3.10 apiece, according to a stock exchange filing, netting NZ$155 million ($131.15 million). The shares last closed at NZ$3.14, and trading was halted today to let the sale proceed.
The gradual sell-down has raised a total of about NZ$464.4 million, or A$409.87 million on a A$91.98 million investment.
Quadrant partially exited Summerset by selling 30% of its shares through an IPO in November 2011, which raised NZ$123.6 million ($99.5 million then). A subsequent sell-down of the majority of remaining shares in March and May 2013 brought in NZ$185.83 million.
Quadrant invested A$91.98 million in the company. It acquired a 49% equity interest in Summerset in April 2009, after then owner AMP Capital Investors failed to take the company public a year earlier. The PE firm bought a further 49% from AMP in 2010, bring its stake to 98%. The remaining 2% was held by the company management.
It also contributed additional equity capital to fund Summerset's growth strategy - the business has opened new villages, aged care facility and also acquired additional land banks for future village developments.
Between 2009 to 2012, revenues grew from NZ$24.6 million to NZ$38.1million, and operating cashflows increased from NZ$32.0 million to NZ$66.3 million.
Summerset is the third-largest listed retirement village operator. Its strong growth prospects are largely based on the expectation that the number of people in New Zealand aged 75 or over will double in the next 20 years.
The investment was made from QPE Fund 2, which has a gross investment IRR of 45%. Quadrant has continued the demographic play in its A$125 million Fund III - earlier this week it led a A$90 million management buyout of Estia Health, an aged-care operator with 1,100 beds under management across 10 facilities in Victoria.
"The aged care sector is highly fragmented, experiencing strong growth driven by the ageing demographic. Estia Health has a substantial opportunity to expand its portfolio to meet the demands of the sector," Marcus Darville, director at Quadrant, said in a statement.
This year Archer Capital acquired Primelife Aged Care - one of Australia's top five for-profit aged care operators - from Lend Lease Group for A$270 million and renamed the business Allity.
Blue Sky Private Equity (BSPE) invested more than A$20 million (US$18.3 million) for around 40% of retirement community operator and developer Oak Tree Group, which is focused on affordable senior living
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