Retirement outfit eyes IPO cash boost

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Retirement village owner-operator Vision Senior Living is considering an initial public offer and share market float of between $80 million and $100 million to fund new building projects, says a financial market source.

The source said VSL would probably list on the NZX in late August or early September.

The IPO will be aimed at institutional and retail investors. The promoters will also look to introduce a new cornerstone shareholder.

The Weekend Herald understands the company has a chunk of real estate in Christchurch that has not been affected by February's earthquake.

Proceeds from the IPO would be used to open a large retirement village in Christchurch, and probably another one in Auckland, the source said.

As it stands, the business is a private equity venture, which is about 70 per cent owned by Goldman Sachs and Partners and Arrow Construction, a New Zealand construction group. It is understood Goldman and Arrow will remain in the company.

Post-float, it is expected they will together own 50 per cent.

VSL was founded in 1997 by Peter Bourke, Bob Foster and Ron Anderson. They built their first retirement home in Henderson in 1999, according to the company's website.

Market conditions are seen as being buoyant, with the share market trading at three-year highs and therefore suitable for a new issue.

VSL, New Zealand's fifth biggest retirement village company, gained first place in the Deloitte's Fast50 over $20 million category in 2004.

Chief executive Mike Oliver said he could not confirm whether the company was seeking an IPO but said it was looking at its capitalisation.

"IPOs are one of the options out there, and we have been looking at that as an option, but I cannot confirm that is an option that we will take," he said.

It's been slim pickings for new listings on the NZX over the past few years.

In February BSH, the result of a merger between Marac and two South Island building societies, listed on the NZX - the first listing in six months. There were only three listings last year.

Industry sources said the retirement village industry appeared to stabilise early in the year and sales had started to improve. There were also better opportunities to buy land.

Ryman Healthcare, the 22-village aged care and retirement operator, said on Thursday it was eyeing possibilities in Australia after pushing up its net after-tax profit.

In the year to March 31 the company made $100.2 million net after-tax profit, up on last year's profit of $78.4 million.

Ryman said increased provision of units and beds matched growing demand. Shares in Ryman closed yesterday at $2.79, a 52-week high, and up from $1.96 a year ago.