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Abano completes Bay Audiology's NZ arm

Published: Tue 3 Nov 2009 03:21 PM
Bay Audiology’s New Zealand arm sold to concentrate on Australia and Asia
by Peter Kerr
Nov. 3 (BusinessWire) – Abano Healthcare Group has confirmed it has sold its New Zealand audiology business to concentrate on hearing care in Australia and Asia.
Abano’s 64 Bay Audiology clinics and business have been sold to National Hearing Care (New Zealand) Ltd, a company associated with Crescent Capital Partners for $158 million.
National has 14 clinics in New Zealand, 82 in Australia. Additionally, Abano is to buy a 13% stake for $30 million in the merged Bay/National audiology business on a 50:50 basis with Bay’s founder Peter Hutson.
Bay Audiology’s sale will provide approximately $118 million cash proceeds to Abano, whose four sectors also include rehabilitation, diagnostics and dental.
About $53 million is earmarked to be returned to shareholders in December through a special early interim dividend and an off-market, pro-rata voluntary share buyback.
The 52 cents a share dividend and buyback together equate to over $2 a share.
Abano shares sold for $6.35 today, a 1.6% lift on yesterday’s prices. The group’s shares have traded up to $7.05 and down to $4.18 over the past year.
“Following the capital return, the reduction of debt and the investment into the new merged Australasian audiology business, Abano will still have sufficient funds to continue investment into its existing growth business,” said Abano chairwoman Alison Paterson.
“These have been identified as audiology in Australia and Asia, dental in New Zealand and Australia and radiology in New Zealand. These are all strong businesses with considerable potential and growth opportunities.”
Fisher Funds has approximately 5% of Abano Healthcare’s shares in its investment portfolio.
The combined business is the largest audiology group in Australasia by a considerable margin, but it is in Asia where the hearing care has much more growth potential.
About 20 – 25% of people with hearing loss in Australia and New Zealand have hearing aids. In Asia, hearing aid penetration rates vary between 0.05% to 4%.
Abano Healthcare Group’s chief financial officer Richard Keys said though Bay Audiology will be up against National Hearing Care in Australia, the two companies are more complementary than competitive.
“Each has a different business model, different ways to reach customers,” said Keys. “National Hearing Centre is largely a call-centre model. Bay Audiology is based in retail malls along with the technology.”
(BusinessWire) 15:20:40

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