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Health fund nib (ASX: NHF) has announced its first foray into National Disability Insurance Scheme (NDIS) plan management through a $150 million equity raise and acquisition of Australia’s seventh largest provider, Maple Plan.
The company entered a trading halt early on Wednesday morning pending the announcement that it would fund its movement via a fully underwritten $135 million institutional placement and $15 million share purchase plan.
Nib will issue approximately 19.6 million new shares under the placement, representing around 4.3 per cent of its shares currently on issue.
Following its completion of the placement on Thursday 13 October, nib will offer its existing eligible shareholders an opportunity to apply for the purchase plan.
NDIS expenditure is forecast to grow from $29 billion in FY22 to $59 billion by FY30, according to its most recent Annual Financial Sustainability Report, and nib has reportedly been weighing up opportunities to earn a slice of that pie for some time.
The group's managing director Mark Fitzgibbon says nib has spent three years assessing the viability of a potential move into NDIS plan management.
The call to jump in was made after nib identified that plan management was closely aligned to its traditional role of helping people choose cover and connect with services.
“The NDIS has become a vitally important part of Australia’s social capital and a significant economic sector,” he says.
“There is an alignment between supporting NDIS participants and our 70-year history as a private health insurer. As a health insurer, we’ve essentially played the role of designing health cover to suit members’ needs and then connected them with the healthcare system.”
Maple Plan, the target of nib’s buyout, is a relatively new player among the 1,200 NDIS plan managers that currently exist.
Nib says that it’s acquisition of Maple Plan is “not material” to its current financial position and opens up the door to “pursue other similarly sized acquisitions as opportunities arise.”
The Melbourne-based company was founded in 2018 by chartered accountants Vincent Lay and Andrian Putra.
Since it’s foundation four years ago, Maple Plan has grown to employ 60 staff in FY22 banked a revenue of approximately $10.8 million.
Commenting on the acquisition, Putra says he is confident in nib’s ability to achieve good results for NDIS participants going forward.
“nib has an impressive reputation in the private healthcare sector,” he says.
“It has a firm commitment to scalable technology, helping participants with real-time budgeting and connecting them to greater choice.”
nib’s acquisition of Maple Plan is expected to be completed in mid-November and is likely to be the first of many, given the company’s declaration that it is “actively considering other plan manager opportunities.”
Nib also released a first quarter FY23 trading update today with an adjusted net revenue reported at $692.3 million, up $22.8 million (3.4 per cent) on the previous corresponding period (pcp).
Net profit after tax saw a $3.8 million fall, down 8.4 per cent on the pcp, noting the impact of burgeoning finance costs and a drop in investment income.
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