Aged care homes operator Estia Health (ASX: EHE) has agreed to a firm $3.20 a share, $959 million enterprise value, offer from US-based global private equity firm Bain Capital.
The equity value of the business under the offer is around $838 million.
The company has entered into a scheme implementation agreement with a Bain Capital entity under which all the company’s shares will be acquired by way of a scheme of arrangement.
Estia’s directors have unanimously recommended Estia shareholders vote in favour of the offer in the absence of a superior proposal and subject to an independent expert concluding the deal is in the best interests of shareholders.
Announcing the agreement on 7 August, Estia noted that the offer represented a 50% premium to its closing share price of $2.14 on 21 March, prior to Bain making an indicative offer of $3 a share on 23 March.
Estia announced on 4 April that it had rejected that offer.
The company announced on 7 June that it had received a revised $3.20-per-share non-binding proposal from Bain.
Estia chair Dr Gary Weiss said the board was confident as to the outlook for the business but recognised that the Bain offer would allow shareholders to realise certain cash value now at an attractive premium. The board had considered a range of matters in coming to its decision including the intrinsic value of the company under a range of scenarios and the price at which its shares might trade over the medium term if the offer was not accepted.
“We believe the proposed transaction is a good outlook for shareholders and our stakeholders more broadly,” Weiss said.
Estia chief executive Sean Bilton said Bain Capital’s interest in the company was a strong endorsement of its strategy to build a market leading aged care provider focused on high quality care for residents and a supportive environment for employees.
Prior to listing, Estia had been majority owned by Quadrant Private Equity with Mercury Capital also holding a stake.
Estia was listed on the ASX in late 2014 after an IPO in which shares were issued at $5.75.
Estia shares rose from $284 to $3.11 after the company announced the deal.
Image: Estia Health’s Bexley Park, NSW, aged care home.