Nursing home operator Estia Health Care continues to expand, acquiring aged care provider Kennedy Health Care Group for an undisclosed sum.
Family-owned Kennedy Health Care is one of the largest private aged care providers in Australia, with 959 places across eight facilities in Sydney and Wollongong.
The acquisition, along with Estia's other developmental activity, will lift Estia's total number of operating places to 5,690 across 66 facilities by the end of the 2015/16 financial year.
Estia has now acquired 1,690 new operating places in total during fiscal 2016 for a total of $399.4 million.
"The acquisition of Kennedy is in line with our stated strategy of acquiring one or more medium-sized groups as we work towards our goal of reaching 10,000 beds by FY2020 (the 2020 financial year)," Estia Health chief executive Paul Gregersen said on Monday.
Estia expects to spend about $88.4 million over five years on redeveloping some of Kennedy's facilities to expand the number of operating places and increase the proportion of single rooms.
Estia will fund the acquisition of Kennedy Health Care through existing debt facilities and an issue of shares worth about $50 million.
Estia also on Monday updated its financial guidance for fiscal 2016. The company expects pro forma net profit to be more than 25 per cent above that of the prior year.
The company's prior guidance was for growth of more than 20 per cent.
In fiscal 2015, Estia generated a pro forma net profit of $44.6 million.
Estia has been steadily adding beds to its network since listing on the Australian share market in December 2014.
In October, Estia acquired three aged care facilities in Adelaide and one on the Gold Coast, offering 181 existing places in total, and 75 places to be added through extensions and redevelopment.
Shares in Estia were 19 cents higher at $7.36 at 1107 AEDT.
