ABA
25/11/2014 08:30
ASSET
PRICE SENSITIVE
REL: 0830 HRS Abano Healthcare Group Limited
ASSET: ABA: Abano Announces Sale of Orthotics Business
Abano Healthcare Group (NZX:ABA) has announced the conditional sale of its
orthotics business, The Orthotic Centre, to private investors. Settlement is
planned for the end of January 2015 following completion of standard
conditions.
The business will be sold at book value, within the range of the recent Grant
Samuels valuation and, after normal settlement adjustments and sale costs,
will result in a small loss which will be reported in Abano's FY15 full year
results. The proceeds will be used to reduce debt and then reinvested into
Abano's growth businesses, in particular dental.
The Orthotic Centre is the leading provider of clinical orthotic services in
New Zealand, with the majority of its revenue generated from DHB contracts.
It holds multiple contracts around New Zealand and provides services from
locations in Auckland, Hamilton, Wellington, Christchurch, Dunedin and
Invercargill.
Managing director of Abano, Mr Alan Clarke, said: "The Orthotic Centre's
exposure to Government contracts is not compatible with Abano's investment
criteria where we prefer healthcare businesses that are funded by private
payment and operate on a fee for service basis. We have had a hold and
maintain strategy in place for this business for several years as we have
focused on other much larger sectors where there is significant scale and
opportunity to add value."
This is the last remaining business in Abano's rehabilitation sector,
following the sale of its brain injury rehabilitation business in June 2012
which also operated in a fixed price contract environment and was heavily
reliant on DHB and ACC funding. For FY14, the Orthotic Centre provided 4% of
Abano's gross revenues.
ENDS
End CA:00258022 For:ABA Type:ASSET Time:2014-11-25 08:30:57
