Babcock & Brown fattens portfolio

BABCOCK & Brown Communities is set to double its aged care property portfolio with the $160 million takeover of Conform Health Group.

Conform is one of the largest remaining privately owned aged care portfolios with around 1,126 operational beds across 12 facilities in New South Wales and one in Queensland.

Following the acquisition, the size of BBC’s residential aged care portfolio will increase to 2,100 beds – making it the fifth largest for profit provider.

BBC’s managing director John Martin said the pre-dominantly high care portfolio is complementary to the group’s existing aged care business.

“One of the unique features of this acquisition is that the Bayside, Coastal Waters and Wyoming facilities are co-located with BBC’s existing retirement communities. On completion, 35% of our managed aged care portfolio is co-located across nine communities. As seniors continue to look for quality retirement and care solutions, BBC’s continuum of care offering is a competitive strength in the Australian retirement market.

“This acquisition enhances our cash earnings with increased exposure to high care beds. It also gives BBC an opportunity to improve the quality of future earnings through select re-development of the portfolio,” he added.

The Conform portfolio is expected to make a significant contribution to BBC’s EBITDA in FY08, and moves BBC closer to its target range of 20-25% EBITDA contribution from aged care.

Conform will be acquired debt free on an implied forecast FY2008 EV/EBITDA multiple of 11.5x. This acquisition price represents an average price per bed of $142,000.

BBC confirms its PDS forecast distributions per security for the 11 months from August 01 2007 to June 30 2008 of 8.4 cents.

Australian Property Journal