Qualcare

Sector Healthcare
Industry Aged Care Operator
Location New Zealand
Investment Date December 2005
Original Deal Size NZ$112m
Realisation Date February 2008
Realisation Deal Size NZ$382m
IRR 93%

Company Description

Qualcare was a leading, integrated aged-care operator, offering a full range of services from independent-living through to hospital level care.

The Fund invested in the buy-out in December 2005. In mid-2006, Qualcare completed the acquisition of six sites from the Presbyterian Services East Coast.

The group also acquired a facility in Waireka. After the completion of this acquisition, the group had 23 sites, 562 units and 1,365 beds.

On 29 February 2008, the sale of Qualcare to Retirement Care NZ, a fund associated with Macquarie Bank, was completed for a consideration of NZ$380m.

Investment Rationale

Major attractions of the opportunity were:

  • Strong market growth backed by demographic trends (i.e. an aging population).
  • A highly fragmented market with non-corporate or sophisticated competitors.
  • Access to a substantial land bank which offered significant development opportunities.

    Ironbridge Value Added

    The key value added from the Ironbridge team was as follows:

    • Following acquisition Ironbridge promptly hired all the key executive management that the business required, namely the CFO, COO, General Counsel and Planning Manager. All were high quality individuals and were attracted by the presence of Ironbridge and the opportunity for growth.
    • Ironbridge supported management focus on operational KPIs driving increased occupancy and strong earnings growth ahead of investment case.
    • Ironbridge helped create the development master plan and hired Klein, a group of specialist architects and planners in the aged care sector, to work with us to create this route map. This identified 800 potential units in excess of original estimate of 600.
    • We initiated and completed three key projects to prove up development potential in land bank to potential purchasers.
    • We relocated both the North Island and South Island accounting and administrative functions to the outskirts of Auckland, New Zealand's major city. As a consequence we rationalized staff, improved the general quality of personnel and consolidated the reporting onto one system. The business now has much better management information.
    • We resourced the key bolt-on acquisition of six additional aged care facilities from Presbyterian Services East Coast ("PSEC") which was acquired for NZ$21.0m.
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