Investment bank Moelis Australia has acquired a 70% controlling stake in care operator Infinite Care from Next Capital for A$45.4 million (US$36.6 million). Yet more proof of how hot the Australian healthcare sector is at the moment, Moelis is also establishing the Moelis Australia Healthcare REIT.
Infinite Care has five aged home care facilities in operation in Adelaide as well as two new greenfield sites under development in Toowoomba and Cornubia in South East Queensland which are due for completion in 2018. It has a development pipeline of 1,500 bed licenses across 13 to be developed facilities in areas of aged care undersupply. Founders and joint managing directors of Infinite Care, Chris Stride and Tony Partridge will continue to run the business.
Completion is expected at the end of October.
Moelis Australia will hold its interest in Infinite Care via a newly established managed fund, the Moelis Australia Aged Care Fund. Moelis Australia will offer third party investors the opportunity to co-invest in the Fund with Moelis Australia retaining a co-investment stake of not less than 10%.
The fund is targeting a total return of more than 20% a year over a four year term.
As a component of the transaction the Moelis Australia Healthcare REIT will acquire the freehold real estate and provide development funding for two of Infinite Care’s new aged care facility developments. The initial investment of A$44.5 million in equity to acquire and fund these assets will be fully subscribed by funds managed by Moelis Australia. The REIT is forecast to deliver investors a distribution yield of approximately 7% per annum and total return of 10% per annum. Moelis Australia will manage the REIT.
