As well as Bolton Clarke and Calvary Healthcare’s recent high-profile acquisitions of private aged care providers Allity and Japara, merger and acquisition activity in the Not For Profit aged care space also features many smaller providers, says Russell Kennedy Principal Rohan Harris (pictured).
Rohan said the law firm is seeing many smaller providers struggling with compliance, workforce shortages, regulation changes and funding issues.
Typically, it is the boards of these organisations that do not have a good understanding of their financial situation or are unwilling to improve or consider merger options.
“Many smaller Not For Profits are just not of a mindset where they are prepared to move their governance structures and personnel beyond what they have had in place for so long,” he said.
“[Mergers] are often seen as a failure when, in fact, a merger with the right merger partner can provide a very successful outcome for all concerned but, particularly, the residents and the local community, if it leads to a more sustainable, viable operation in the future.” Other private providers will be weighing up their options too, added Rohan.
“The compliance burdens are getting higher. There is an opportunity now, where they can realise the value of their investment, particularly if they have land holdings,” he said.
Potential acquirers are also out there, looking for opportunities, particularly those that have already successfully managed mergers.
“To me, that is equally, if not more, important than the actual transaction, because we only see the merger benefits if you have the capacity within your organisation to integrate the new business and make it work.”
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