Ann: GENERAL: ARV: Arvida Group expands into Auckland market

• Release Date: 24/06/15 08:44
• Summary: GENERAL: ARV: Arvida Group expands into Auckland market
• Price Sensitive: No
• Download Document  5.55KB

					ARV
24/06/2015 08:44
GENERAL
PRICE SENSITIVE
REL: 0844 HRS Arvida Group Limited (NS)

GENERAL: ARV: Arvida Group expands into Auckland market

Transaction highlights:

o Strategic acquisition of three complementary, well established aged care
facilities situated in premium Auckland locations
o The villages have a strong care focus, 97% occupancy and meaningful
brownfield development opportunities
o The villages are being purchased for $62m which represents an equity value
to FY16 underlying profit multiple from the three villages of 8.4x
o The acquisition is being partly funded by an underwritten $30 million
placement at $0.84 and a share purchase plan to eligible shareholders for up
to $5 million The acquisition and associated equity raising is expected to be
dividend and value enhancing to Arvida shareholders with 12% earnings per
share accretion to Arvida's FY16 underlying profit (1) on a pro forma basis
o The acquisition is in line with Arvida's strategy of broadening its
portfolio with value enhancing care focussed facilities

Arvida Group Limited (NZX:ARV) is pleased to announce the conditional
acquisition of Aria Bay, Aria Park and Aria Gardens (collectively, "Aria
Villages") for approximately $62 million. The Aria Villages comprise three
high quality retirement villages and aged care facilities situated in premium
locations across Auckland that provide retirement services to around 350
residents. In particular, Aria Gardens, is an award-winning care facility and
has won the NZACA/EBOS 2014 Excellence in Care Award within the Community
Connections Category and the 2015 Waitemata DHB Health Excellence Award for
Compassionate Patient Support.

The acquisition is for 100% of the shares in the Aria Villages. Based on PFI
forecasts for Arvida set at the time of the initial public offering and
Arvida's earnings estimates of the Aria Villages, the acquisition represents
an equity value to anticipated FY16 underlying profit multiple of 8.4x. The
transaction is expected to be 12% earnings accretive to FY16 underlying
profit on a pro forma basis. Further earnings improvement is expected beyond
FY16 following the completion of new beds at Aria Gardens, sell down of newly
completed apartments at Aria Bay and possible future developments at Aria
Bay.

Chris Stokes of Aria Villages stated "on behalf of the Aria shareholders, I'm
delighted to see the Aria Villages being placed into good hands and we are
excited to become part of the Arvida Group. We consider that the transaction
will benefit staff and residents alike."

Arvida Chief Executive Officer, Bill McDonald said "the Aria Villages were
identified as an important strategic acquisition for Arvida with high
recognition in their local communities of Epsom, Browns Bay and Albany. The
Aria Villages provide a portfolio of 3 high quality facilities with a high
needs-based offering across 295 care beds, 70 serviced apartments and 9 new
independent apartments."

"The acquisition broadens Arvida's North Island presence into the Auckland
market and was a compelling opportunity for Arvida. The acquisition is
expected to be value and dividend enhancing to shareholders and provide
opportunities for further growth. We look forward to providing high quality
retirement and aged care services to the residents, a great working
environment with career development opportunities within the wider group for
staff and overseeing the continued success of the Aria Villages as part of
Arvida."

Arvida Chairman Peter Wilson added "the acquisition of the Aria Villages is
on strategy and demonstrates Arvida's ability to work effectively to identify
and secure high quality privately owned opportunities within the retirement
sector. In the near future, we can see continued growth of the Aria Villages
within the broader Arvida Group. Following the acquisition, our immediate
focus will be on the integration of the Aria Villages and Arvida foundation
villages and the brownfield development opportunities within the group."

Completion of the acquisition is anticipated in July 2015 and is conditional
upon statutory supervisor consents and obtaining District Health Board and
Ministry of Health approvals.

To fund the acquisition, Arvida is raising up to $41m of new equity through
the issue of $6m of Arvida shares to vendor shareholders of the Aria
Villages, which will be subject to the same escrow arrangements as
shareholders under Arvida's IPO,  and a $30m underwritten placement at $0.84
per share.

The placement will be followed by a share purchase plan (SPP) to provide an
opportunity for eligible shareholders to participate in the capital raising
under the same terms as the placement participants, up to a maximum of $5m.
The balance of the acquisition will be funded under Arvida's existing debt
facility.

Forsyth Barr Limited has been appointed as the Lead Manager to the placement
and Forsyth Barr Group Limited as underwriter.

There will be a conference call at 11am, Wednesday 24 June for Arvida to
present the transaction to interested parties. Details for the presentation
are provided below.

Dial in:
0800 448 441 (NZ toll free)
1800 556 270 (Aust toll free)

Pin:
5662078

Footnote:
(1) - Underlying profit is a non-GAAP financial measure and represents the
adjustment to net profit after tax to replace any fair value movements in
investment property values, with realised components of movements in
investment property value and to eliminate one-off items and deferred tax
charges or credits.

Attached:
(1)  Media Release
(2)  Investor Presentation
(3)  Cleansing Notices
(4)  Appendix 7

- ENDS -
End CA:00266076 For:ARV    Type:GENERAL    Time:2015-06-24 08:44:25