Allied Work Force plans healthcare provider buy

Simon Hull owner and founder of Allied Work Force. Photo / Dean Purcell

Listed casual labour firm Allied Work Force is eyeing an opportunity in the lucrative healthcare sector, yesterday announcing a conditional agreement to purchase an Auckland-based health provider.

Allied's managing director, Simon Hull, says the company's move towards wholly acquiring Panacea Healthcare follows research into possible growth areas for the firm.

Hull, who founded Allied in 1988, said the firm was not releasing the financial details of the deal, or the conditions that needed to be met for it to go unconditional.

The deal would likely be clinched within the next two weeks, he said.

Hull said Panacea had been singled out by Allied because it was a well-performing company with high standards.

"[Panacea is] extremely well respected in the industry and we're creating a partnership with the existing executive team [at Panacea] that we believe we will be able to take forward," he said.

Hull said reports and investigations indicated that the New Zealand health sector was going to face significant recruitment challenges in the future.

"Allied is well experienced in employment and recruitment.

"We believe that in working with Panacea we can offer them some assistance and no doubt they'll teach us some tricks as well," he said.

Hull said New Zealand's rapidly ageing population meant there would be high demand for health services in the future.

Allied will use both cash and bank facilities to purchase the business.

The market responded positively to the news of the planned acquisition yesterday, with Allied's share price closing up 2c at $1.00 last night.

Panacea, which was established in 1977 and employs about 400 field staff, provides ACC-funded home and community support services for the disabled and elderly, as well as companionship and nursing.

Allied says Panacea will operate under a separate governance structure with its existing management remaining in place.

Panacea's major shareholder and current managing director, Trish Neal, would become executive director over the next 12 months.

Neal said Allied's acquisition would "future-proof" Panacea against the challenge of finding staff as demand for the firm's services grows.

Allied's purchase of Panacea followed its acquisition last month of a 75 per cent stake in a Waihi-based labour provider, which will be turned into a subsidiary called AWF Mourant.

The company reported a profit of $2 million for the year to March 31, 2010, from a revenue of $70.4 million.

Hull said Allied was on the lookout for more acquisition opportunities.