Abano makes offer to acquire 100% of Dental Partners
Abano Healthcare Group has today made an offer to acquire the outstanding 30% shareholding in its Australian dental group, Dental Partners Pty Limited (Dental Partners).
Dental Partners was established in 2008, with Abano holding 70% of the shares and a group of minority shareholders, including Dental Partners CEO, Mike Timoney, Dental Partners board member, David Garofalo and a number of founding dentists, holding the remaining 30% interest through their investment vehicle, Dental Investments Holdings Limited (DIHL).
The Offer is to acquire all the shares of Dental Investments Holdings Limited, an Australian incorporated company. The Offer is unconditional and subject only to Abano gaining not less than 90% of the shares in DIHL, at which time it can compulsorily acquire the remaining DIHL shares. The Offer has the support of the DIHL board of directors who collectively hold 76.03% of the shares in DIHL.
The investment by Abano is a logical step to increase its shareholding in a highly scalable, private payment, growth business that operates in a very large market. Both Mike Timoney and David Garofalo, who are directors of both Dental Partners and DIHL, have advised they will accept the Offer. Both have committed to staying on in their current roles within Dental Partners, and will invest NZ$2 million into new Abano shares, which will be placed with them at the average market price of the preceding 20 business days before this announcement.
DIHL holds no other assets aside from the Dental Partners shareholding, and the Offer is valued at A$14.04 million. It is anticipated that acceptances to the 90% threshold will be obtained by the end of June 2012 and that the balance of the DIHL shares will be acquired by the end of July 2012.
Chairman of Abano, Trevor Janes, said: “The Abano Board was pleased to approve this investment. Dental Partners is an excellent business and has demonstrated strong and profitable growth over the past four years. It is now one of Australia’s largest dental consolidators and a significant revenue and earnings generator for Abano.”
Managing director of Abano, Alan Clarke, commented: “We have enjoyed a very rewarding partnership with Mike and David, as Dental Partners has grown from concept to a network of 53 practices, with more than 450 staff, across Australia, which complements Abano’s 64 practices in New Zealand. We are delighted to not only increase our holding in this very valuable business, but to retain both Mike’s and David’s considerable skills in the next phase of accelerated growth and development. Their decision to reinvest into Abano shares is a demonstration of their personal commitment to both Abano and Dental Partners, and to our strategy going forward.”
Mike Timoney, CEO of Dental Partners, said: “Our vision was to create Australia’s leading dental group by providing a platform for quality dental teams to excel in patient care. Our successful partnership with Abano has been instrumental in achieving this vision and I am delighted to continue as Dental Partners CEO for the foreseeable future. The Dental Partners culture, personality and our established record of growth is set to continue with an accelerated acquisition programme in place to take advantage of the enormous potential offered by the A$4.5 billion Australian dental market.”
The Offer will bring the Dental Partners’ ownership structure into line with Abano’s other New Zealand based dental business, Lumino The Dentists, opening up opportunities for a greater level of cross-fertilisation of ideas, co-operation and experience in both markets. However, the two businesses will continue to be run separately under their own management structures, preserving their individual and unique cultures, identities and styles.
The acquisition will be funded through debt. In order to facilitate this investment and Abano’s other growth plans, the existing Abano ASB banking facility will be increased from $40 million to $50 million.