Abano takeover wins valuer’s endorsement

Abano Healthcare’s board identified and attracted interest from more than 30 parties before agreeing to back a takeover via a scheme of arrangement by private equity firm BGH Capital and the Ontario Teachers’ Pension Plan Board.

Independent valuer KordaMentha said the $5.70 per share offer, which values Abano at $149.8 million, is above the midpoint of its $5.29-$5.92 valuation and “unless a superior proposal is forthcoming, the positives of approving the scheme outweigh the negatives”.

Abano’s directors are unanimously recommending the offer, saying it “accelerates a capital return to shareholders and mitigates the risks that would otherwise be involved in delivering the opportunities from executing Abano’s strategic plan.” Abano’s largest shareholder with 15.9 per cent, Harbour Asset Management, declined to comment on the offer.

Abano owns 239 dental practices branded Maven in Australia and Lumino in New Zealand.

KordaMentha has taken a dim view of Abano’s prospects if the offer were to fail.

“In our view, the near-term outlook for Abano is for relatively flat financial performance unless management’s initiatives to improve same-practice revenue and profitability growth are successful,” KordaMentha said in its report on the offer.

“The initiatives have been introduced relatively recently and it remains to be seen how successful they will be,” it said.

“Abano does not have a strong track record of producing same-practice growth in its Australian clinics.”