KKR considers bid for Australia's Regis Aged Care - report
KKR is said to be interested in buying Macquarie Group’s take in Regis Aged Care, one of Australia's largest private senior care home operators. There is significant private equity interest in the aged care space, which is seen as ripe for consolidation.
According to The Wall Street Journal, Macquarie's 46% interest in Regis could be worth more than A$170 million ($163 million). Industry sources previously told AVCJ that the group was interested in selling part of or its entire stake.
Regis provides residential care services through a network of more than 45 facilities nationwide. It also offers low-level care services to elderly people who are still able to live at home, operating in part under the government-funded Community Aged Care Package.
The company was the product of a A$220 million merger between Macquarie Capital Alliance Group's (MCAG) Retirement Care Australia business and Regis Group's local operation in 2007. Regis took 54% of the combined entity to MCAG's 46%. MCAG was taken private the following year by Macquarie Group, with backing from AlpInvest Partners, HarbourVest Partners, Pantheon, Partners Group, Paul Capital and Portfolio Advisors.
Already this year, Archer Capital-owned Australian Aged Care Partners bought property group Lend Lease's aged care unit for A$270 million, AMP Capital agreed to sell roughly half of Domain Principal Group to Singapore's G.K. Goh Holdings for A$136.7 million, and Quadrant Private Equity bought Estia Health for A$90 million.
"We will continue to grow the business through brownfield acquisitions and possibly some greenfield, and we will be part of the consolidation that is occurring within the sector," said Marcus Darville, a director at Quadrant, said of the Estia deal. "The sector has been attracting more institutional capital and we think that will continue. There are no indigenous Australian listed companies in the space but we expect that to change as well."
Approximately 60% of Australia's aged-care market is non-profit. The largest single player - either non-profit or for-profit - accounts for less than 5,000 of the 187,000 beds available in the sector as a whole, with top five players have a collective market share of 15% of the market or less.
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