Aged care operator Estia Health receives $775m takeover offer from Bain Capital

One of Australia’s largest residential aged care providers, Estia Health (ASX: EHE), has today received a takeover offer from US private-equity firm Bain Capital valuing the target at $775 million.

Under the proposal, EHE shareholders would receive $3 per share, representing a 28.2 per cent premium to the last share price of $2.34 on 23 March.

In a statement on the ASX, Estia Health said it was considering the indicative proposal to assess whether it was in the best interests of shareholders to engage with Bain Capital.

Off the back of the announcement, shares in Estia Health have risen 15 per cent to $2.70 each.

“There is no certainty that the indicative proposal will result in a binding offer or that any transaction will eventuate,” the company said.

Founded in 2005, Estia Health has 70-plus aged care homes across Victoria, South Australia, New South Wales and Queensland that offer short-term respite care, long-term care, dementia care and palliative care.

The group has been focused on growing its portfolio, having acquired a 120-room Mount Clear facility in Ballarat just last month.

“When added to our acquisition of four Premier Health Care homes completed in December, and the opening of our homes in St Ives and Aberglasslyn, both in New South Wales, towards the end of this calendar year, we will have added 789 places, or 13 per cent to the Group’s capacity since June 2022," CEO Sean Bilton said in the group's interim FY23 results posted a month ago. 

Estia Health reported a $25.3 million net loss after tax for the six months ended 31 December – a sharp increase compared to a loss of $8.1 million a year prior. Revenue increased by nine per cent to hit $373 million.

The offer from Bain Capital comes just two weeks after the group announced Anthony Rice will come on as chief financial officer (CFO) from mid-July, following a stint as interim CFO for retirement village operator Levande.

The current CFO, Steve Lemlin, will remain with Estia Health until the end of August to ensure a smooth transition.

Estia Health’s board members include Bilton and Dr Gary Weiss, a corporate raider who became chair at Brisbane-based Cromwell Property Group more than a year ago after ARA Group wrested control of the group and instigated a board spill.