ASX-Listed Infratil (IFT) set to buy majority stake in Australian diagnostic imaging business Qscan

Summary

  • Infratil Limited (ASX:IFT) has announced an offer to acquire up to 60% of diagnostic imaging company Qscan Group Holdings Pty Ltd for a total cash equity consideration of up to A$ 330 million.
  • Morrison & Co Growth Infrastructure Fund (MGIF) in conjunction with Infratil has offered to acquire up to 15% stake in Qscan.
  • Infratil and MGIF have signed a Binding Offer Deed to acquire up to 75% of Qscan after both the entities entered into an agreed form Share Sale Agreement.
  • Infratil had raised additional equity of NZ$ 300 million earlier in the month of June 2020 to fulfil its growth agenda and cash any investment opportunities that may arise.

ASX-listed infrastructure investment company Infratil Limited (ASX: IFT), via its latest announcement, has informed about its conditional offer to acquire up to 60% of Qscan Group Holding Pty Ltd from Quadrant Private Equity and the doctor and management shareholders.

Qscan is a comprehensive diagnostic imaging business and one of the largest radiology providers in Australia with more than 70 clinics across the country. Infratil has offered to acquire a maximum stake of 60% in Qscan for a total cash equity deal of up to A$ 330 million.

The offer has been made with the Morrison & Co Growth Infrastructure Fund (MGIF), which has offered to buy up to 15% stake in Qscan. The acquisition Enterprise Value (EV) for a 75% stake of Qscan is A$ 735 million. Of the total, up to A$ 550 million will be funded through equity and the rest through debt facilities.

MGIF and Infratil have entered into a Binding Offer Deed under which both the entities made a conditional offer to enter into a Share Sale Agreement for acquiring up to 75% of Qscan. The doctor and management shareholders own an aggregate of 50% of Qscan, and QPE will discuss the acquisition conditions with them.

If the conditions are not met until 10 November 2020, the acquisition will not proceed further, and both the entities will be entitled to recover their transaction costs. The last hurdle in the acquisition completion would be getting approval from the Foreign Investment Review Board of Australia (FIRB) by 31 December 2020, which can be extended till 26 February 2021.

The 60% stake will allow Infratil to have strong governance rights and it will be able to sustain the growth and development of the business. Qscan has a secured revenue base and strong track record of generating profits which will allow Infratil to become a market leader in the diagnostic imaging business.

IFT stock traded at A$ 5.200 with an intraday loss of 3.704% as on 27 October 2020.

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