THE MERGER of two large retirement care groups earlier this month was actually a “merger of equals” instead of a takeover, as is the norm in Australia, according to a firm that advised on the deal.
Wilmoth Field Warne Lawyers (WFW) and Mallesons Stephen Jaques advised the parties to the $600 million merger between Regis Group and Retirement Care Australia (RCA).
Macquarie Capital Alliance Group owned 100 per cent of RCA prior to the merger. It now owns 46 per cent of the equity in the merged entity, while previous Regis shareholders now own 54 per cent.
Although the merged group will continue under the name of his client, Regis, lead partner at WFW, Thomas Kim, said the two companies’ almost identical sizes meant it was a true merger.
“This was really a merger of equals because in terms of the number of operations, we are talking about 19 and 18 facilities; the number of beds are very similar. In terms of the enterprise value I think Regis was a little bit higher,” he said.
“In Australia most claimed mergers are takeovers. [But] we were advising a party in a merger in a true sense, we couldn’t just look after our clients commercial imperatives and drivers, but also needed to provide relevant solutions and an outcome that offered benefits to both parties.”
The merged group is now the second-largest private aged care operator in Australia with more than 3,600 beds across 37 facilities, with ten in Queensland, six in New South Wales, 15 in Victoria, two in South Australia and four in Western Australia.
Over the next three years, the company expects these numbers to increase to 41 facilities housing a total of 4,500 beds.
The merger was finalised on 2 July, and WFW said it became involved in late March. However, Kim said drafting of the documents probably did not begin until about mid April and the deal was signed within a month.
As well as Kim, WFW managing partner Ewan Luff was also involved in the team finalising the deal.
“Given the size of the operations, there were a lot of documents involved … so it was completed quite quickly,” said Kim.
Clayton Utz advised the banks on the debt financing involved in the merger.