Infratil and the New Zealand Superannuation Fund will buy Australia's fourth-biggest retirement village operator RetireAustralia for A$640.2 million to tap into the ageing demographic across the Tasman.
The Wellington-based infrastructure investor and government pension fund will spend A$429.5 million in cash with the balance funded through existing bank debt on RetireAustralia's balance sheet, they said in a joint statement.
The Australian retirement village operator reported underlying earnings before interest and tax of A$34.3 million in the year ended June 30, and is forecast to report underlying Ebit of A$35 million to $40 million in 2015, giving the deal an earnings multiple of 18.6 times. The transaction is expected to settle on Dec. 31.
"RetireAustralia provides a strong platform in an Australian sector that offers very attractive long-term growth prospects," Infratil chief executive Marko Bogoievski said.
"We have spent a considerable amount of time evaluating the sector in Australia and identified RetireAustralia as a high quality access point given the profile of the assets and the capability of the management team.