AMP 4.57% $1.03 amp limited

principal aged care

  1. 432 Posts.
    sniped from afr.com, may have something to do with it.

    AMP-backed Principal Aged Care yesterday emerged as the second-largest private player in Australia's nursing home industry after buying 39 aged-care homes from Doug Moran's Moran Health Care Group for $129.3 million.

    Principal, which is owned by a consortium of institutional funds, of which AMP Capital Investors manages 95.5 per cent, struck a deal to buy the leases and aged-care operations of the homes.

    Moran Group will receive $87.2 million and Principal will also take on liabilities of $42.1 million. The 39 homes, which have 3068 beds in total, span NSW, Queensland, Victoria and Western Australia.

    The 3500 Moran Group staff working at the homes will be offered employment by Principal on their existing terms and conditions.

    AMP-managed funds have controlled the freehold of the properties in a complex structure since 1998 and stymied attempts by rival operators to acquire the portfolio.

    The fund manager has used its power to thwart bids by rivals DCA, Ramsay and even James Fielding.

    Some of the bidders are said to have offered to take Moran Group for nothing several years ago. But the family has turned around the business and its profit margins are ahead of its listed competitors.

    Winning control of the portfolio is the first step in AMP's plans to lead the consolidation in Australia's nursing home industry.

    AMP Capital Investors head of infrastructure, Australia, Greg Roder said: "We saw it as an opportunity for an element of consolidation in this sector which we think is a growth sector in Australia." He said aged care offered further opportunities for consolidation and growth.

    The fund manager also believes it has the right structure in place to take on rival Amity. "There's some advantage in being an integrated owner-operator," Dr Roder said. "There can alway be some synergies," he said.

    The Moran family has been a big seller of nursing homes as the industry consolidates.

    In August 2005, Macquarie Bank's Retirement Care Australia bought 1010 beds from the group in an $186 million deal.

    It remains the top manager for now as it provides management services to these homes and will do so for the AMP portfolio for another two years. These services are expected to switch to Principal.

    Moran Group is now on the look out for greenfield sites where it can recycle the sale profits into potentially higher yielding development opportunities.

    Moran Group director of operations Mark Moran said the transaction strengthened the group's financial position for growth. He said Moran Group still managed more than 4000 beds.

    "We're excited about the opportunities presented to the market in greenfields site development," Mr Moran said.
 
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