Bain Capital-backed Estia in $400m-plus BlueCross auction

afr.com:

Fresh from its $838 million takeover of aged care operator Estia Health, Bain Capital is back for another piece of the pie.

Street Talk understands the private equity giant is among parties bidding for BlueCross Aged Care, a Melbourne residential aged care provider jointly owned by the Eccles family and real estate investment firm Sapphire Holdings Group.

Canterbury Partners has been hired to test buyer appetite and oversee a two-stage auction, sources told this column. Indicative bids were due to be submitted this weekend.

Bain Capital won over the Estia Health board with its $838 million buyout offer in August. Chris Hopkins

Blue Cross operates 31 aged care residences in Victoria, housing more than 2,600 residents and supporting over 1,000 in their homes, making it the sixth-largest for-profit player nationally. CBRE has valued Blue Cross’s property portfolio at $450 million.

The business was founded in 1993 by David Eccles – who sits on the board alongside Cathy Eccles – and has expanded since, acquiring 10 residences between 1998 and 2000. Sapphire Holdings picked up a 43 per cent stake in 2006 and acquired 3rd Age in 2007, adding six residences to the business. BlueCross merged with Sapphire Care in 2018.

Prospective buyers were told BlueCross is forecast to make $400 million revenue in financial year 2024 and $40 million EBITDA. The sector typically trades at 10-times-plus EBITDA or 0.85-times to 0.90-times book value for a high-quality operator, which would suggest a sale price of circa $400 million. Current occupancy is understood to be north of 95 per cent.

Of course, Bain is no stranger to the aged care sector, winning its five-month pursuit of one of Australia’s largest operators,Estia Health, in August. At