Estia Health's cash flow and internal rate of return have reportedly already met the targets of their December 2023 Bain Capital acquisition, and the US-based purchaser, who spent $838 million, is considering selling out, according to The Australian.
Now the Aged Care Bill has passed through Parliament, the publication is speculating it could spark a wave of merger and acquisition activity, with private equity firms reportedly actively assessing the market.
The Bain Capital acquisition valued Estia Health, which has 75 aged care homes, at $280,000 per bed, which back in August 2023 we said was "rolled gold" for Bain Capital. The cost to build a new aged care bed currently sits at around the $450,000 mark, and a bed is generally valued at around $350,000.
Already in the market, there is speculation that Pacific Equity Partners is in "exclusive" talks to acquire Opal HealthCare, Australia's largest residential aged care provider, valuing the company, owned by GK Goh Holdings and AMP Capital, at more than $2 billion.
Regis Aged Care's shares have soared more than 20% since September, when the Bill was introduced to Parliament, and are up about 66% since August, which could make a takeover for the provider less likely.
