Evolution Healthcare pays $10.5m for potential blocking stake in rival Acurity

Evolution Healthcare, an Australian private equity healthcare investor that owns Lower Hutt's Boulcott Hospital, has acquired a potential blocking stake in Acurity Health Group [NZX: ACY], the owner of three rival private hospitals.

Sydney-based Evolution has built an 11 percent stake in publicly listed Acurity, according to a substantial security holder notice to the NZX today. Investment bank Cameron Partners. helped Evolution build the stake at $5.50 a share since Friday, a 36 percent premium to Thursday's $4.05 closing price, according to the documents. The shares haven't traded today.

Evolution is increasing its exposure to the private health sector as ageing populations in Australia and New Zealand put increasing demand on public health services, with a likely spin off for private hospitals. Evolution reportedly paid more than $20 million for Boulcott Hospital after being granted Overseas Investment Office approval in November last year, and the stake in Acurity has cost it about $10.5 million.

Under New Zealand takeover rules, a 10 percent stake is enough to prevent a full takeover of a company and may be enough to request a board seat. Evolution managing director Ben Thynne didn't immediately return calls requesting comment.

Acurity owns Wakefield Hospital and Bowen Hospital in Wellington and Royston Hospital in Hawke's Bay. Acurity is 50.01 percent owned by Austron, a venture between the Royston Hospital Trust Board and interests associated with Canterbury businessman Mark Stewart, who jointly acquired the controlling stake for $6 a share last year.

Evolution has said it plans to expand Boulcott Hospital, and in Australia the company owns Shellharbour Private Hospital, mental health facility South Coast Private and Canberra Private Hospital.

Institutional investors which sold Acurity shares to Evolution include Accident Compensation Corp, which sold a 1.16 percent stake, and Milford Asset Management, according to substantial security holder notices. Milford sold its 2.67 percent stake in Acurity because the offer was a good premium to the previous day's close, fund manager Brian Gaynor said.

BusinessDesk