This week Macquarie Bank Ltd., the largest investment bank in Australia, had struck a deal to buy Leisureworld Caregiving Centres of Markham, Ont.
The Canadian company, controlled by chief executive officer Herman Grad, owns 19 long-term care facilities in Ontario, along with two retirement homes and one independent living facility, with a total of 3,275 beds.
Macquarie already has interests in the retirement home and health care businesses in Australia. No stranger to Canada, it is a member of the investor group that owns Ontario's Highway 407 toll road and is participating in the expansion of the Vancouver to Whistler, B.C., road link known as the Sea-to-Sky Highway.
The price the Australian bank has agreed to pay for Leisureworld is rich indeed, according to analyst Douglas Loe at Dlouhy Merchant Capital. It works out to $170,000 for each bed the Canadian company operates, "which is the highest price we've ever seen for an acquisition in this space," he said.
Extendicare Inc., operates 440 long-term care and assisted living facilities across North America -- 76 of them in Canada -- with capacity for over 34,400 residents.
Macquarie did not cite Canada's demographics for buying Leisureworld. Instead, it said the retirement home operator's business has many of the characteristics of some of its other key investments, including "stable revenue streams and predictable cash flows, primarily from government funding and subsidies."
A Bloomberg report on the acquisition said 13 per cent of Canada's population is over 65, twice the global average.
Let's see 34,400 times $150,000 a bed (we'll give 'em a deal) makes EXE worth $5,160,000,000 minus debt of $800,000,000 = 4,360,000,000 and we divide that by shares out of 68,000,000 and EXE is worth $64 Can a share. WOW!