New Zealand-based Abano Healthcare Group has today entered into a deal to acquire up to 84 per cent of Townsville-based dental roll-up 1300Smiles (ASX: ONT), giving it an equity value of $166 million.
The proposal would see investors receive $8 per share, while founder shareholders (who together hold approximately 59.8 per cent of the company) would receive cash consideration of up to $6.33 per share.
The proposed transaction comes as 1300Smiles today posted its FY21 results, with the company recording a net profit after tax of $9.6 million for the period - up 34.7 per cent on the prior year - and statutory revenue of $44.9 million.
It comes nearly two years after the Australian Financial Review published speculation 1300Smiles was in talks to acquire Abano's Maven Dental Group in 2019, however that deal never materialised.
1300Smiles has concluded the proposed deal is in the best interest of all shareholders, and the founder shareholders said they intend to vote in favour of the scheme.
“Abano Healthcare is a highly complementary partner for 1300Smiles with a strong Australian footprint of 106 practices, largely operated under the Maven Dental brand, to which 1300Smiles’ high quality portfolio of 33 practices will be added if the Scheme is successful,” 1300Smiles said.
To assess the proposal, 1300Smiles established an independent board committee (IBC) which has also backed the deal.
“The IBC is unanimous in its view that the proposed Shame is in the best interests of shareholders and represents compelling value,” IBC chairman Robert Jones said.
“This transaction clearly validates the company’s strong operational and financial performance, and recognises the commitment to high quality dental care displayed by the professionals across our network.
“The IBC believes that Abano Healthcare will be excellent custodians of 1300Smiles’ business going forward, in terms of continuing strong dentist and patient outcomes and growing the business.”
Shares in ONT are up 16.81 per cent to $8.20 per share at 10.37am AEST.
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