Following an out of this world track record of investments in the retirement village and aged care space, Sydney private equity group Quadrant has just purchased 50% of W.A. based St Ives Home Care for a suggested $150 million.
St Ives is owned by a Royal Automobile Club of W.A. (RAC). It is the largest operator of retirement villages in W.A. and one of the largest home care operators nationally. RAC bought into the private St Ives in 2006, taking full ownership in 2013. It then sold its two aged care facilities to Opal in 2015.
RAC CO Terry Agnew says they want to grow home care rapidly and could achieve that best with a partner and they have chosen Quadrant. This will be interesting to watch.
Led by Marcus Darville, Quadrant Private Equity made a killing out of the purchase of Summerset retirement villages in New Zealand in 2008 with an investment of $90 million which they built up before selling out in 2013 for $424 million.
In 2013 Quadrant bought Melbourne based Estia with a reported $40 million equity; they then added Padman and Cook aged care groups with a further $11 million worth of equity contribution. They then floated Estia in December 2014 for $1.1 billion netting Quadrant over $200 million by the time they sold out fully in May this year.
Can they do the same with home care which faces significant disruption come February 2017 when consumer directed care comes into effect properly. This will create a new landscape with the traditional providers, dominated by the Not For Profits.
Demonstrating both the fragmentation and new enthusiasm for the home care business is the fact that a 112 new businesses applied to the Department of Health in FY16 as home care providers with 77 being approved.
Expect a large number of acquisitions by Quadrant, in partnership with the RAC/St Ives.
