Healthia receives buy-out proposal from Pacific Equity Partners’ entity Harold BidCo

Allied healthcare organisation Healthia (ASX: HLA) has received a buy-out proposal from Harold BidCo for 100% of its fully-diluted share capital.

Under the terms of the deal, Healthia shareholders will have the option to receive either $1.80 cash per Healthia share, an unlisted scrip consideration or a combination of both.

The cash consideration offer represents a premium of 84.6% to Healthia’s last closing price of $0.975 per share and 72.8% to the three-month volume weighted average price to the end of August.

The unlisted scrip consideration provides shareholders with the potential to participate in the future of Healthia, subject to rounding and scale back mechanisms.

The all-cash option is the default consideration under the proposed buy-out and will automatically be allocated to Healthia shareholders who do not elect an unlisted scrip consideration option.

Buy-out funding

Harold BidCo is an entity owned by funds advised by Pacific Equity Partners.

Pacific will fund the cash consideration portion of the buy-out bid through equity committed by certain funds that it has managed or advised, as well as third-party financing.

It has also reached agreement with Healthia investors MA Financial Group and Wilson Asset Management Group which will see it granted options to buy a total of 19.9% of issued Healthia shares.

The buy-out is not subject to any financing or funding conditions.

Healthia has appointed Monash Advisory as financial adviser and Clayton Utz as legal adviser for the transaction.

Director participation

Some of Healthia’s directors and key managers have elected to participate in the scrip consideration for a total of 15.74 million Healthia shares (or approximately 11% of the company’s total shares) that they hold or control and in the absence of a superior proposal.

MA Financial Group and Wilson Asset Management Group, together with investor Regal Funds Management, have signalled their intention to vote all Healthia shares held or controlled by them (representing approximately 26.8% of all shares) in favour of the deal.

The board of Healthia has made no recommendation on whether or not shareholders should elect to receive an unlisted scrip consideration.

Best interests

Healthia chairman Dr Glen Richards said the board had “unanimously concluded” that Harold BidCo’s proposal was in the company’s best interests.

“This deal represents a very attractive outcome for our shareholders, clinic partners, patients, clinicians and team members… in our view, the all-cash price at a significant premium to Healthia’s recent share price reflects the inherent value of Healthia’s business operations, national platform and growth strategy in Australia and New Zealand,” he said.

If the buy-out is approved, there will be no change to Healthia’s clinic class shareholder model which forms part of the company’s clinic-led business model and clinician retention program.