Estia Health’s aged care home in Bannockburn, Vic. Source: Estia Health
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  • Estia Health (EHE) receives a $775 million non-binding and indicative takeover proposal from leading global private investment firm Bain Capital
  • Bain is looking to snap up all shares in Estia Health at $3 a pop — a 28.2 per cent premium to EHE’s trading price at market close on Thursday
  • EHE is reviewing the offer and warns there is no certainty that the proposal will result in a binding offer or that any transaction will follow
  • Since 2014, Estia has grown to become one of Australia’s leading aged-care operators, with 72 homes across SA, VIC, NSW and QLD
  • Shares in EHE are up 14.1 per cent and trading at $2.67 at 3:05 pm AEDT

Shares in Estia Health (EHE) are continuing their healthy rise after the company announced on Friday it had received a takeover bid from Bain Capital.

Bain has offered to snap up all EHE shares for $3 a pop — valuing Estia at around $775 million.

The offer represents a 28.2 per cent premium to Estia shares, which traded at $2.35 at market close on Thursday.

The aged care operator confirmed in an ASX announcement that the indicative proposal was subject to a number of conditions, however.

It would require the satisfactory completion of due diligence, the execution of a binding scheme implementation agreement, the unanimous recommendation from Estia’s board, approval of Bain Capital’s Investment Committee and approval of the Foreign Investment Review Board.

Estia said it was reviewing the offer with its financial and legal advisors to evaluate if it’s in the best interests of shareholders to engage with Bain.

The company has indicated that there is no certainty that the proposal would result in a binding offer or that any transaction would follow.

Founded in 2014, Estia Health has grown to become one of Australia’s leading aged-care operators, with 72 homes across South Australia, Victoria, New South Wales and Queensland.

Today, Estia cares for more than 8000 residents each year.

The proposed acquisition from Bain adds to the growing list of global mergers and acquisitions (M&A) taking place in recent years.

While overall deal volumes in 2022 weren’t quite the record-breaking 65,000 deals in 2021, they still sat at 9 per cent above pre-pandemic levels.

The Intralinks 2023 Global M&A Dealmakers Sentiment Report, conducted in the second quarter of 2022, surveyed 300 M&A dealmakers from 225 corporate firms and 75 private equity firms across North America, Europe, the Middle East, Africa, Asia Pacific, and Latin America.

It found that 62 per cent of respondents expected an increase in the overall levels of M&A activity over 2023.

Morgan Shaw Advisory Managing Director Graham Morgan said now was the time to get a business ready for sale in Australia.

“It is always advisable to run your business such that you can choose to exit when a lucrative opportunity comes along,” Mr Morgan said.

In this case, Mr Morgan has been proven right, as Estia weighs up what some might consider being “a lucrative opportunity”.

In April last year, EML Payments (EML) was also in discussions with Bain over a potential takeover, but talks eventually ceased without an agreed deal.

As the residential aged-care sector felt the brunt of the pandemic both in Australia and overseas, EHE has recovered since then, rising 18 per cent over the year, and 34 per cent in the past six months.

Shares in EHE were up 14.1 per cent and trading at $2.67 at 3:05 pm AEDT.

EHE by the numbers
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