Retirement village operator Arvida is to buy a group of privately owned villages in a major expansion of its business.
Arena Living Holdings' Knightsbridge Village in Auckland. Photo: Supplied
It has agreed to buy Arena Living Holdings, which owns six villages in Auckland and Tauranga, for about $345 million.
The acquisition from private investment funds will add more than a thousand villas, apartments and serviced apartments to Arvida's existing portfolio of 4325 units and beds, increasing its holdings by nearly a quarter.
"A portfolio of this scale in these locations is challenging to replicate, with most newer developments in desirable central Auckland and Tauranga locations being more apartment focused," Arvida chief executive Jeremy Nicoll said.
He said the new sites opened up a range of development options, including introducing care through retrofitting care suites, home care services, and developing bare land or low-density sites over time, and could add more than 100 care suites and 150 units through a combination of retrofitting and site development.
The purchase price was 12 percent below a $394m June valuation of Arena, and was expected to add $32m to $34m to Arvida's underlying profit this year.
The deal is being financed by a placement of shares at $1.96 each with institutional investors worth $155m; an offer to existing shareholders of one new share for every 6.57 share held at $1.85 each; and $23m of bank debt.