Adamantem buys New Zealand's Heritage Lifecare

Heritage is an aged-care and retirement village operator with a capacity of 969 beds and 320 living units across 19 facilities. Its largest facility, situated on the outskirts of Auckland, comprises a 121-bed care home, surrounded by a 31-unit retirement village, five serviced apartments and a purpose-built hospital. 10 of Heritage’s sites are primed for further expansion, which will be supported by Adamantem.

“We were attracted to the company’s premium portfolio of properties and the team’s strong operational focus on resident care. Within a highly fragmented industry, Heritage Lifecare has substantial opportunities to further expand its portfolio and we look forward to supporting the team during this important next phase of the company’s growth,” Anthony Kerwick, managing director of Adamantem, said in a statement.

Kerwick and Rob Koczkar between them spent 25 years at PEP before departing in 2014. They launched Adamantem last year and are said to be raising A$600 million ($450 million) for their first fund. Speaking to AVCJ in February, Kerwick said the firm is “interested in helping management teams identify and fund the calculated risks that can grow their businesses.” Targets could be private enterprises looking for growth capital, subsidiaries of bigger conglomerates, or listed companies.

PE investors see retirement villages and aged care services as a means of leveraging the ageing populations of Australia and New Zealand. While Quadrant Private Equity did generate an estimated multiple of more than 3.7x on its investment in New Zealand retirement village operator Summerset, which it exited in 2013, most PE activity has focused on Australia.

Notable deals include Archer Capital’s purchase of Lend Lease’s aged care unit – now known as Allity – for in 2013, Quadrant’s acquisition of Estia Health later the same year (it listed the business in 2014), and New Zealand Superannuation Fund’s purchase of RetireAustralia in partnership with Infratil in 2014. More recently, Advent Partners invested in W&L Holdings and Bain Capital Credit bought Craigcare.

However, regulatory action over the last few years has complicated matters. Guidance appeared to restrict the ability of private operators to charge fees for additional services, creating uncertainty over revenue projections, while there have been changes to the government subsidies that have historically made up a significant portion of aged care facility operators’ funding.

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• Topics
• Australasia
• Buyouts
• Real estate
• Consumer
• New Zealand
• Adamantem Capital