Small healthcare provider Pulse Health has made a takeover offer for Vision Eye Institute. Photo: Clerkenwell
Private hospital operator Pulse Health has made a bid for Vision Eye Institute in an all-scrip deal that values the laser eye specialist network at $162.2 million.
If the deal is approved by shareholders, medical centre and pathology operator Primary Health Care would become the second-largest shareholder in the merged entity with a 12.3 per cent stake, courtesy of its 19.63 per cent share in Vision Eye Institute.
The largest shareholder would be Viburnum Funds, with a 20.6 per cent stake in the merged group. Viburnum, which has a 29.8 per cent stake in Pulse and a 15.9 per cent in Vision, has already backed the terms of the takeover bid.
Under the proposed deal Vision shareholders would receive 1.6 Pulse shares for each of their Vision shares.
The offer values Vision’s shares at 88¢ each, 31 per cent more than its closing price on Friday.
Both companies were placed in a trading halt on Monday, prior to the takeover offer being announced to the Australian Securities Exchange.
The merged group will have a market capitalisation of about $255 million and a pro forma financial year 2015 earnings before interest, tax, depreciation and amortisation of $32.3 million.
“We believe the merger creates a compelling opportunity for both Vision and Pulse shareholders through the creation of one of Australia’s leading providers of specialist healthcare services, with a broad network of niche hospitals, surgery centres and ophthalmic practices,” Pulse chairman Stuart James said.
Pulse chief executive Phillipa Blakey said the combination of the businesses would form a first-class organisation.
“Vision’s strong ophthalmic service and surgery centre network, combined with Pulse’s hospital network and expertise in providing doctors with the service, environment and support they need to fully focus on treating their patients will create a first-class healthcare organisation,” she said.
Shareholders were also expected to benefit from increased liquidity of the stock, the statement provided to the ASX said.
Vision, Australia’s largest provider of ophthalmic care, reported a flat half-yearly revenue of $54.9 million in February and an adjusted net profit after tax of $6.7 million.
Pulse estimated annual pre-tax operating cost savings of $2 million through the merger, to be realised through a reduction in public company costs and head office and administrative functions.
Pulse hospitals are located predominantly in regional Australia. It has operations in Bega, Noosa, Gympie and Kingaroy and also runs a rehabilitation hospital in Sydney.
Pulse shares last traded at 56¢ and Vision stocks were at 75.5¢.