(MENAFN - ProactiveInvestors - Australia) Recruitment firm Chandler Macleod Group (ASX: CMG) has entered into a binding agreement to acquire all of the shares in Vivir Healthcare for A34.6 million, with the transaction forecast to be immediately earnings per share accretive in the 2013 financial year.
Vivir is expected to contribute between 3 and 4 million to Chandler Macleod's profit before tax in the second half of the 2013 financial year, and between 9 and 11 million in the 2014 financial year.
Vivir is Australia's leading allied healthcare brand in the large and rapidly expanding residential aged care and community care sectors.
An earn-out payment is potentially payable depending on the financial performance of Vivir in the 2014 financial year.
The transaction, to be funded by term debt, is scheduled to complete today.
Vivir delivers physiotherapy, pain management, dietetics and workplace health and safety to around 240 residential aged care facilities.
On a per-resident basis, Vivir provides clinical services to over 18,000 aged care facility beds through 13,000 weekly appointments. This is around 9% of the national market.
Aged care facility services growth
The demand for aged care facility services is expected to grow as the population ages.
Over the next 40 years, the number of Australians over 85 is projected to grow by about 4% per annum.
Vivir's business is predominantly Victorian based providing opportunities for significant growth into other states, particularly New South Wales and Queensland.
The company has consistently delivered year-on-year growth and is on track to achieve double digit revenue growth in the current financial year.
Vivir is a strong cash-generative business with a high conversion of EBITDA to cash. Services are typically contracted with customers for two to five years. Vivir will have no debt on its balance sheet.
Chandler Macleod's expertise in sourcing, assessing and managing talent will enable Vivir to expand into other states and expand into other services.
The company also believes some of its existing services can be sold into Vivir's customer base.