Estia Health locks in $625m from cornerstone investors ahead of IPO

THE $1 billion Estia Health has locked in $625 million from cornerstone investors for the aged care provider’s planned IPO, ahead of next week’s official opening of the offer.

Shares were offered at $5.75, or a multiple of 21-times forecast net profit, giving the company a market value of $1.035 billion.

The commitment from cornerstone investors has already exceeded the minimum offer size, flagged in Estia’s prospectus earlier this week, indicating strong demand for the aged care provider.

Estia has said in the prospectus it plans to sell 75.9 million to 146.8 million shares in the IPO, at an indicative price range of $5.17 to $6.96 each. It aims to raise between $528 million to $834m.

Private equity owner Quadrant is believed to be selling 38 per cent of its stake, and will hold about 17 per cent in the company after the float.

The proceeds of the offer will be used to repay Estia’s existing debt, as well as to fund further growth opportunities, the company said.

The aged care provider is well positioned to make more acquisitions after the IPO, taking the opportunity to grow as the number of players in the sector further contracts, Data Room reported earlier.

The stock is expected to start trading on December 5.

Deutsche Bank, UBS, and Morgan Stanley are the joint lead managers on the IPO.

Business Spectator