Radius Residential (NZX:RAD) acquires Clare House, Waikiwi

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Radius Residential (NZX:RAD) acquires Clare House, Waikiwi

Retirement Village Company
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Highlights

  • Radius Residential Care has revealed of buying Clare House, which is a retirement village-cum care facility, located in Waikiwi, Invercargill.
  • The purchase price is fixed at NZ$14.5 million, due to be settled in the early next month.

Radius Residential Care Limited (NZX:RAD) has disclosed the acquisition of Waikiwi-based, Clare House, which is an integrated retirement village, plus a care facility.

Radius Residential Care is New Zealand's healthcare services provider, which offers aged residential care facilities as well as in-house training and skills development.

Must Read: Which are the well-known retirement village shares in New Zealand?

NZX retirement village- RAD

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The new acquisition would boost RAD’s earnings

The Company has acquired all the land, buildings, and operations of Clare House, which consists of 69 care beds and 25 ORA units for NZ$14.5 million, settlement of which would be done on 1 November.

According to Brien Cree, RAD’s Executive Chairman, the said acquisition would expand Radius’ regional footprint, thus creating a robust infrastructure for its growth prospects.

The takeover of Clare House would enhance NZ$1.7 million towards RAD’s underlying EBITDA. Further, the acquisition would also generate an AFFO of nearly NZ$0.8 million.

It is pointed out that the above-mentioned acquisition is fully funded from a new facility offered by ASB.

Related Read: Radius Residential (NZX:RAD): What are its new banking facilities?

Moreover, for the period beyond FY22, further earnings growth of underlying EBITDA of about NZ$0.5 million is forecasted to be derived from the scale advantages of integrating Clare House with Radius Residential Care.

On 11 October, at the time of writing, Radius Residential Care was up by 1.92% at NZ$0.530.

Bottom Line

Focused on acquiring value accretive care facilities, Radius Residential Care’s latest acquisition of Clare House is of strategic importance, which would greatly enhance its organic growth.   

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