Ann: MERGER: MET: Metlifecare Announces Merger

• Release Date: 07/05/12 10:45
• Summary: MERGER: MET: Metlifecare Announces Merger
• Price Sensitive: No
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MET
07/05/2012 08:45
MERGER

REL: 0845 HRS Metlifecare Limited

MERGER: MET: Metlifecare Announces Merger

Strengthened value platform for Metlifecare following strategic acquisitions

Leading retirement village and aged care provider, Metlifecare Limited (NZX:
MET), today announced it has signed merger agreements to acquire both Vision
Senior Living Limited (Vision) and Private Life Care Holdings Limited (PLC)
on a relative NTA basis using the company's scrip to settle the transaction.

The merger will improve Metlifecare's portfolio balance between mature
villages, developing villages and growth opportunities, and will enhance the
Company's development capability.

"This is an exciting initiative for Metlifecare, at very attractive valuation
metrics", said Metlifecare Independent Director, Mr Brent Harman.

"The three companies offer different attributes which, when combined, will
provide initial cost synergies through integration, increased scale and
diversification, and will improve the outlook for village development and
growth."

Managing Director of Metlifecare, Mr Alan Edwards, said: "The merger will
strengthen Metlifecare's presence in the key Auckland retirement village
market and ensure that the Company continues to compete strongly in the New
Zealand retirement village sector.

"Vision has a strong development pipeline and an experienced development
team, with growing cash flows from its existing five villages. PLC consists
of three mature villages with good, reliable cash flows.  Metlifecare's
experience in providing a continuum of care will be extended to Vision and
PLC villages.

"The merger will be immediately cash flow accretive and will provide an
enhanced platform for Metlifecare to drive growth and shareholder value."

Vision and PLC offer complementary property portfolios with a total of eight
villages in premium locations in Auckland, Hamilton, Papamoa and Kerikeri.
The merger will see the Metlifecare portfolio increase from 16 villages to
24, including three villages at development stage. The number of units will
grow from 2,460 to 3,902, with an increase in brownfield and greenfield
development capacity from 380 units to 1,011 units.  The number of Care Beds
will remain at 407 with a land bank of an additional 110 beds.

The transactions will be funded by the issue of approximately 51.5 million
new ordinary shares to the shareholders of Vision and PLC.  The transaction
terms and consideration were determined on a NTA to NTA basis for both Vision
and PLC.

Metlifecare will also issue a further 4.2 million shares in exchange for $10
million in capital raised from the existing Vision shareholders to pay down
debt. The total transaction will increase the number of shares on issue from
144.1 million to approximately 199.8 million. Metlifecare will

refinance existing Vision and PLC debt with an extension to its own banking
facilities.  The Company's banking syndicate have confirmed an offer of
funding to facilitate the transaction.

The transaction is conditional upon Overseas Investment Act approval,
shareholder approval, certain third party consents and no material adverse
changes. The resolutions to acquire Vision and PLC will be put to
shareholders at a Special Meeting to be held in Auckland.  Northington
Partners has been commissioned to provide an independent appraisal report in
advance of the meeting to approve the merger. The parties are working to
satisfy all conditions by 30 June 2012, with settlement scheduled for 2 July
2012.

Vision is currently owned 68% by private equity funds managed by Goldman
Sachs and the balance by private shareholders in Arrow International Group
Limited. PLC is 100% owned by Retirement Villages New Zealand Limited, a
subsidiary of unlisted investment fund, Retirement Villages Group (RVG),
Metlifecare's major shareholder. Therefore, as a related party to the
transaction, RVG will be excluded from voting on the resolution at the
Special Meeting. RVG has indicated that it will sell down its expanded
shareholding by 16.5 million shares to retail investors, through a documented
process, which will take their shareholding to below 50%.

Mr Harman commented: "We have sought independent commercial advice throughout
the process. The consideration being offered is equity, and therefore
Metlifecare will effectively acquire Vision and PLC at the same discount as
Metlifecare's shares are trading to NTA.  The merger is designed to be NTA
neutral prior to transaction costs and Vision contributing $10m in cash."

Total assets will be in excess of $2 billion, with total equity of
approximately $789 million. Metlifecare's debt as a percentage of investment
property will increase to 18.7% following the merger.

The Metlifecare Board has also confirmed that it continues to be committed to
increasing the ratio of Independent Directors on the Board, and is looking to
appoint two additional Independent Directors before the end of the calendar
year.  This will see the number of Independent Directors increase to four by
31 December 2012.

The shares issued to Vision shareholders for the acquisition will be subject
to transfer restrictions for 6 to 12 months and RVG has agreed to maintain
its shareholding at not less than 35% for at least 12 months.

Metlifecare received financial advice on the merger from Grant Samuel &
Associates and legal advice from Chapman Tripp.

Number of Existing Villages - MET 16 Combined Entity 24
Number of villages including development sites - MET 17 Combined Entity 26
Existing Units - MET 2,460 Combined Entity 3,902
Land Bank (Units) - MET 380 Combined Entity 1,011 (inclusive of Ilam Park,
Unsworth Heights and Glenfield)
Existing Care Beds - MET 407 Combined Entity 407
Land Bank (Care Beds)- MET 70 Combined Entity 110 (inclusive of Ilam Park,
Unsworth Heights and Glenfield)

ENDS

For more information, please contact:
Alan Edwards
Managing Director and CEO, Metlifecare
Tel: 09-539-8000

Released on behalf of Metlifecare by Jackie Ellis, spice communications group
tel 09 360 8500 or email [email protected]

About Metlifecare:
Metlifecare is a publicly listed aged care and retirement lifestyle company.
Established in 1986, the company has a proven track record of successfully
owning and managing retirement villages in New Zealand. Metlifecare currently
owns villages in prime locations throughout New Zealand, with most providing
provide a full continuum of care from independent villas and apartments
through to serviced apartments, rest homes and hospitals.
www.metlifecare.co.nz
End CA:00222595 For:MET    Type:MERGER     Time:2012-05-07 08:45:09