ElderCare New Zealand, the former retirement home company, yesterday made its first major push into pure healthcare, with a $10.5 million purchase of Medical Laboratory Wellington and its subsidiary, Nelson Diagnostic Laboratories.
ElderCare is paying $7.35 million cash, payable on settlement, and $3.15 million in capital convertible notes to be issued
over three years.
Preliminary due diligence has been undertaken and a heads of agreement signed.
The balance of due diligence and contract completion is expected next month, Eldercare said.
"It is a significant step towards ElderCare's stated intention, first signalled at the annual meeting last year, to transition into a balanced healthcare and medical services provider," the company said.
Medical Laboratory Wellington has operated since 1932, offering a full range of medical laboratory testing to the public, doctors, hospital outpatients and private hospitals in Wellington, Paraparaumu and Porirua.
It is an IANZ registered laboratory and a Telarc registered supplier (ISO9002), servicing 400 general practitioners, 94 medical centres and 30 private hospitals and nursing homes.
Nelson Diagnostic Laboratories serves 130 GPs, 12 private hospitals and nursing homes in Nelson and Marlborough.
Both facilities are full-service community pathology laboratories, and the combined operation is one of the three largest in New Zealand.
Medical Laboratory Wellington's chief executive and managing partner, Dr Clint Teague, will continue to head the company and will be appointed to the board of ElderCare when the sale is complete.
"The community pathology market is worth an estimated $180 million per annum, and community laboratories form a core part of the primary healthcare delivery mechanism," said ElderCare chief executive Alan Clarke.
The acquisition fitted ElderCare's strategy of acquiring well-managed, efficient healthcare and medical services businesses, he said.
Last year Eldercare began its expansion into the broader healthcare market with the acquisition of rehabilitation services provider Ranworth HealthCare.
Eldercare shares were up 1c at 18c yesterday.
- NZPA
