I recently had the opportunity to speak at the ACSA Annual Finance Symposium about what I see as a “two speed economy” which is continuing to play out for not-for-profit residential aged care providers. This has and will continue to drive mergers and acquisitions in the sector.
At one end of the scale we have some very large recently completed or announced transactions. The top of mind examples are the 2021 takeover of then ASX listed Japara Healthcare by Calvary, and the proposed acquisition of Allity by Bolton & Clarke. These transactions will see Calvary and Bolton & Clarke take their place as two of the largest residential aged care providers in Australia. Other privately owned providers are probably considering their options.
At the other end of the scale, we are seeing many smaller providers struggle with compliance burdens, attracting and retaining enough quality staff, likely ongoing changes to legal regulation, and funding challenges. It is often the case that Boards (who are typically volunteers) do not have a true understanding of their situation or a willingness to improve or seriously consider merger options.
My key takeaways:
- If you are a potential acquirer, be ready for more acquisition opportunities
- Doing nothing in today’s disruptive environment is not a viable strategy
- If exiting is an option, don’t leave it too late – it takes time to prepare
- Ask me and our expert M&A team for help
How we can help
If you require assistance in relation to commercial transactions in the aged care and retirement living sectors, please do not hesitate to contact Rohan Harris or the broader Russell Kennedy Aged Care Team.
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