A consortium including the $25.8 billion New Zealand Superannuation Fund (NZ Super) has entered into a $640 million agreement to purchase retirement living business RetireAustralia.
NZ Super and New Zealand infrastructure investor Intratil both represent 50 per cent of the consortium.
The total consideration of the RetireAustralia agreement is $640 million, with Intratil and NZ Super providing cash equity of $429.5 million ($214.8 million each).
The balance of the agreement will be funded by existing bank debt on RetireAustralia’s balance sheet, according to a statement on the ASX.
“The consideration includes estimated transaction costs of $23.5 million and is subject to the usual completion adjustments for working capital and net debt,” said the statement.
The transaction is expected to settle on 31 December 2014.
NZ Super chief investment officer Matt Whineray said he was pleased to increase the sovereign wealth fund’s exposure to the Australian retirement village sector.
“The sector’s attractive demographics and future growth opportunities make it a good fit for long-term investors such as the NZ Super Fund,” Mr Whineray said.
Infratil chief executive Marko Bogoievski described RetireAustralia as a “high quality access point” to the retirement living sector in Australia.
“With 28 villages across New South Wales, South Australia and Queensland and over 3,700 independent living units and apartments, the business has the potential to become the market leader in the retirement living sector,” Mr Bogoievski said.
RetireAustralia is currently owned by Morgan Stanley Real Estate Investing and the JP Morgan Global Special Opportunities Group.
If the acquisition goes ahead, RetireAustralia will be managed by investment management firm HRL Morrison & Co on behalf of Infratil and the NZ Super.