Australia’s love affair with private equity-sponsored privatisations continues unabated. CVC Asia Pacific has agreed to acquire DCA, an Australian healthcare business specialising in diagnostic imaging and residential aged care services, in an all cash offer that gives DCA an enterprise value of A$2.7 billion (€1.58 billion; $2.03 billion).
If the deal goes ahead, the acquisition price will be 11.8 times DCA’s full year 2006 EBITDA of A$226 million. DCA’s managing director David Vaux, Gary Barnier, CEO of the company’s diagnostic imaging group I-MED, and David Armstrong, CEO of aged care division Amity, and other members of DCA’s senior management team will invest alongside CVC in the take-private.
The news comes as buyout firms increase their focus on Australia’s public companies. Listed retailer Coles Myer recently rejected a A$17.4 billion offer from a consortium including CVC, Kohlberg Kravis Roberts, Bain Capital, The Blackstone Group, Macquarie Bank, Merrill Lynch, TPG-Newbridge and Pacific Equity Partners. The business is reportedly still being stalked by private equity firms, with Permira, Cerberus and CCMP Capital Asia expected to make a rival bid.
Affinity Equity Partners, a pan-Asian private equity firm, has also had its A$432 million offer for rival retailer Colorado Group accepted by the company’s board of directors.
DCA’s board of directors have unanimously approved CVC’s offer of A$3.50 per share, a premium of 37 percent over the average share price for the three months prior to the company receiving a conditional offer from CVC.
At 10am BST, DCA’s share price was trading at A$3.42 per share, up from Friday’s closing price of A$3.2.
Debt funding for the transaction will be underwritten by Goldman Sachs Credit Partners and BOS International. CVC was advised by Goldman Sachs JBWere and Blake Dawson Waldron.
Local media reports earlier in the month said that Australian private equity firms Ironbridge Capital and Pacific Equity Partners as well as Macquarie Bank had shown an interest in acquiring DCA.
CVC and Ironbridge Capital previously owned Affinity Healthcare, an Australian hospital operator, alongside the Government of Singapore Investment Corp. The consortium acquired the business for A$813 million in October 2003 and exited their investment to Ramsey Healthcare for $1.4 billion in April 2005.