WELLINGTON, May 7 (Reuters) - New Zealand rest home operator Metlifecare Ltd said on Monday it has signed deal to buy two retirement villages through the issue of shares worth NZ$113 million ($90 million) to expand its business.
Metlifecare will issue about 51.5 million new shares to acquire unlisted Vision Senior Living Limited and Private Life Care Holdings Limited (PLC).
As part of the deal, Metlifecare will issue an additional 4.2 million shares for NZ$10 million in capital raised from the existing Vision shareholders to pay down debt.
It said it would refinance the existing debt of both companies being bought through an extension of its own facilities.
The move will improve Metlifecare’s portfolio balance between mature villages, developing villages and growth opportunities, the company said.
“The merger will be immediately cash flow accretive,” said Alan Edwards, managing director of Metlifecare.
Vision is owned 68 percent by private equity funds managed by Goldman Sachs and the balance by private shareholders in Arrow International Group Limited.
PLC is fully-owned by Retirement Villages New Zealand Limited, a unit of unlisted investment fund, Retirement Villages Group (RVG), Metlifecare’s major shareholder.
RVG would sell down its enlarged shareholding to retail investors to take its stake below 50 percent, but had undertaken not to hold less than 35 percent for at least 12 months.
The transaction is conditional upon regulatory approval, shareholder approval and certain third party consents.
Metlifecare, the third-biggest listed retirement village operator by capitalisation after Ryman Healthcare and the newly listed Summerset Group, was advised by Grant Samuel & Associates.
Its shares last traded down 4.6 percent at NZ$2.10. So far this year the stock has fallen around 3 percent compared with an 8 percent gain for the benchmark NZX-50 index. ($1=NZ$1.26) (Reporting by Mantik Kusjanto)