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Regis Healthcare (ASX: REG), one of Australia’s largest aged-care operators, has acquired privately owned CPSM Care for $74.2 million in a move that will expand its footprint in Southeast Queensland.
CPSM owns five aged-care facilities in Brisbane and the Gold Coast comprising a total of 644 beds and will lift the Regis aged-care portfolio to 68 freehold homes and a total of 7,604 beds. Regis currently operates 24 properties in Queensland.
The Melbourne-based Regis says the acquisition is in line with its strategy of broadening its residential aged care footprint through acquisition of premium properties.
The CPSM properties – located at Camp Hill Aged Care, Holland Park Aged Care, Aspley Aged Care, Lodges on George at Kippa-Ring and Magnolia Aged Care at Coomera - generated $67 million in operating revenue in FY23, delivering underlying EBITDA of $13 million.
Regis says the five homes were operating at an average occupancy of 96 per cent in the first quarter of FY24.
The aged care operator will assume a $151 million RAD (refundable accommodation deposit) liability as part of the transaction. RAD is payable to residents on their departure from aged care facilities.
CPSM, which was founded in 2010, has a relatively new portfolio of assets with more than 80 per cent of the 644 operational beds in its facilities built or refurbished since 2018.
“The business has a strong reputation as a high quality residential aged care provider with an excellent accreditation history and financial performance,” says Regis.
The company says the acquisition, which will be funded by existing debt facilities, has been struck on a multiple of 5.7 times FY23 underlying EBITDA, which breaks down to about $115,000 per bed.
Regis says the acquisition is expected to be earnings accretive in FY24 with contributions increasing over time.
Regis’ CEO Dr Linda Mellors says CPSM is a highly regarded residential aged care provider in Queensland’.
“This transaction is consistent with our strategy to broaden our residential aged care footprint through the acquisition of premium homes,” she says.
“CPSM shares many common values with Regis and I commend the founders for the high-quality business they have built.
“I look forward to welcoming CPSM’s residents, families, employees and communities to Regis and ensuring a seamless transition of services.”
The CPSM acquisition is expected to be completed on 1 December 2023.
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