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ElderCare settles rehab business acquisitions

Media Release
ELDERCARE SETTLES ACQUISITION OF NEW REHABILITATION BUSINESSES

ElderCare New Zealand Ltd today settled the acquisition of the businesses of Burton’s Healthcare Limited and Health Partners Limited, for a cash payment of $1.5 million.

The acquisitions strengthen the Group’s position as New Zealand’s leading provider of brain injury assessment and rehabilitation, with a total of three business now offering care and treatment in this area.

CEO of ElderCare, Mr Alan Clarke, commented on the settlement: “We are delighted to formally welcome the staff at Burtons and Health Partners to the ElderCare group. We believe there are significant growth opportunities in the Rehabilitation sector, and look forward to working with our management teams to further develop these.”

Further information on the acquisitions, as released on 8 July 2003, is provided below:

The acquisitions are in line with ElderCare’s strategic objective to grow both new and existing healthcare and medical sectors through investment in successful businesses and organic expansion. Revenues in ElderCare’s Rehabilitation sector are expected to increase by over 20 percent as a result of the acquisitions, with 95 percent of additional revenue sourced from publicly funded contracts.

Burton’s Healthcare was founded in 1992 to provide non-residential brain injury rehabilitation treatment to clients, with Health Partners set up a year later to offer brain injury assessment and referral services.

ElderCare owns 100 percent of Ranworth Healthcare, New Zealand’s leading brain injury rehabilitation practice. Burton’s Healthcare and Health Partners will operate alongside the Ranworth brand, strengthening ElderCare’s presence in the North Island, as well as extending the assessment and referral, and non-residential rehabilitation services on offer.

ElderCare will acquire 100 percent of both businesses, for a cash payment of approximately $1.5 million. Under the Group’s devolved management structure, the businesses will retain their own successful systems, practices and staff with the Operations Manager reporting to ElderCare’s General Manager – Rehabilitation, Graham Menary.

Chief Executive Officer for ElderCare, Mr Alan Clarke said:

“We are continually identifying investments that we believe are compatible both with a corporate involvement and with our existing healthcare businesses, and where there is demonstrable evidence of cashflow generation and profitability. Burton’s Healthcare and Health Partners are important strategic acquisitions for the Group and will provide additional revenue and the opportunity to expand the offer in our Rehabilitation sector.”

There are an average of 15,000 concussions and brain injuries in New Zealand each year and total brain injury treatment and support costs are in excess of $60 million per annum, with the majority funded by ACC.

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