Hmc Capital Limited · ASX:HMC
Hmc Capital — Merger or Acquisition (March 2023)
60 slides from Hmc Capital's merger presentation, Mar 30, 2023
Slide 1: Transformational Acquisition & Equity Raising Presentation
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION OR RELEASE IN THE UNITED STATES Campbelltown Private Hospital Nepean Sydney Private Hospital Southwest Hospital Knox Private Hospital Northpark Private Hospital HealthCo Healthcare & Wellness REIT Transformational Acquisition & Equity Raising Prese
Slide 2: Acknowledgement of Country
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Acknowledgement of Country HealthCo acknowledges the Traditional Custodians of country throughout Australia and celebrates their diverse culture and connections to land, sea and commu
Slide 3: Agenda
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Presenters Agenda Transaction overview David Di Pilla Will McMicking 1. Strategic rationale HMC Capital HMC Capital Group Managing Director & CEO Group CFO 2. Equity raising Sam Morri
Slide 4: Important Notices and Disclaimer
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Important Notices and Disclaimer This presentation (Presentation) has been prepared by HCW Funds Management Limited (ABN 58 104 438 100, AFSL 239882) (Responsible Entity) as responsib
Slide 5: Important Notices and Disclaimer
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Important Notices and Disclaimer Future performance This Presentation contains certain “forward looking statements”. Forward looking statements can generally be identified by the use
Slide 6: Important Notices and Disclaimer
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Important Notices and Disclaimer In connection with the Offer, one or more investors may elect to acquire an economic interest in the New Units (Economic Interest), instead of subscri
Slide 7: Acquisition overview
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Acquisition overview $1.2bn acquisition secured on attractive terms with HCW acquiring $730m of hospitals ▪ HMC Capital (ASX: HMC) today announced that entities managed by HMC have en
Slide 8: Transaction structure
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Transaction structure HCW to own $730m interest in Healthscope Hospital Portfolio on balance sheet and via Unlisted Fund co-investment ~$1,200m1 Healthscope Hospital Portfolio Acquisi
Slide 9: Healthscope Hospital Portfolio
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Healthscope Hospital Portfolio Rare opportunity to acquire a large-scale private hospital portfolio Northpark Private Hospital The Victorian Rehab Centre Pine Rivers Private Hospital
Slide 10: Transaction overview
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Transaction overview Equity raising ▪ The HCW Acquisition will be funded through an underwritten $320m equity raising (Equity Raising), comprising a $89m institutional placement size
Slide 11: Transaction overview
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Transaction overview HMC transaction ▪ HMC Capital has agreed to improve HCW’s cost structure following the significant increase in the scale of the entity post the HCW Acquisition: s
Slide 12: 1. Strategic Rationale
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx 1. STRATEGIC RATIONALE 12 Knox Private Hospital
Slide 13: Strategic rationale
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Strategic rationale Rare opportunity to acquire a large-scale portfolio of metro located critical healthcare infrastructure assets that materially improve income security and quality
Slide 14: Transformative acquisition of rare scale and quality
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx 1 Transformative acquisition of rare scale and quality Irreplaceable hospital infrastructure located in Australia’s major cities Acquisition overview Geographic exposure Healthscope K
Slide 15: Acquisition improves HCW's portfolio income profile and increases scale and quality
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx 1 Acquisition improves HCW’s portfolio income profile and increases the scale and quality of the portfolio Portfolio statistics Post acquisition portfolio subsectors2,6,7 Pre Acquisit
Slide 16: Long term strategic partnership with Healthscope
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx 2 Long term strategic partnership with Healthscope New lease terms significantly strengthen tenant covenant and NOI growth potential ENHANCED TENANT COVENANT SIGNIFICANT LONG TERM AND
Slide 17: Compelling acquisition price
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx 3 Compelling acquisition price Acquisition NOI yield of 5.8% and unlevered IRR of >9% Acquisition NOI yield Acquisition unlevered IRR vs. comparable transactions4 5.8%1 Long term aver
Slide 18: Compelling financial returns
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx 3 Compelling financial returns FFO & DPU accretive whilst maintaining gearing at midpoint of 30-40% target range post completion of Identified Asset Sales Annualised 4Q FY23 FFO (cpu)
Slide 19: HCW is now Australia's largest diversified healthcare REIT
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx 4 HCW is now Australia’s largest diversified healthcare REIT Transformative acquisition which materially increases HCW’s scale and relevance Gross asset value (GAV) S&P/ASX Index free
Slide 20: Unlisted Fund target investment mandate
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx 4 Unlisted Fund target investment mandate Establishment of complementary Unlisted Fund will assist HCW in accessing a larger pool of investment and development opportunities ✓ HMC has
Slide 21: HCW now has a ~$1bn accretive development pipeline
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx 4 HCW now has a ~$1bn1 accretive development pipeline Well positioned to unlock material value & growth whilst further enhancing portfolio scale and diversification ✓ Post HCW Acquisi
Slide 22: 2. Equity Raising
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx 2. EQUITY RAISING 22 Campbelltown Private Hospital
Slide 23: Offer terms
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Offer terms Offer structure ▪ $320m underwritten Equity Raising comprised of: − An institutional placement (Placement) to raise ~$89m, and − A 1 for 1.90 pro rata accelerated non-reno
Slide 24: Bonus Unit
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Bonus Unit Ranking ▪ The New Units issued under the Placement and Entitlement Offer will rank equally in all respects with existing ordinary units on issue from the date of allotment
Slide 25: Bonus Unit – Attractive issue price and structure
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Bonus Unit – Attractive issue price and structure Fully funded by HMC Capital Implied 5.4% ~8.9%1 $1.35 $1.35 1 for 28 discount to discount to Issue Issue Bonus last trading last trad
Slide 26: Sources and uses
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Sources and uses Sources of funds $m Equity Raising 320 Identified Asset Sales1 125 Existing debt facilities 143 Total sources of funds 588 Uses of funds $m Acquisition of Tranche 1 a
Slide 27: Indicative timetable
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Indicative timetable Event Date Announcement of Equity Raising Thursday, 30 March 2023 Institutional Placement and Entitlement Offer bookbuild Thursday, 30 March 2023 Announcement of
Slide 28: 3. HCW Pro-forma Balance Sheet & Capital Management Update
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx 3. HCW PRO-FORMA BALANCE SHEET & CAPITAL MANAGEMENT UPDATE 28 Campbelltown Private Hospital
Slide 29: Pro-forma balance sheet
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Pro-forma balance sheet 1. 1 Settlement of Macquarie Park Acquisition completed in Mar-23 2. 2 Healthscope portfolio acquisition impacts including equity raise, $125m of Identified As
Slide 30: Capital management update
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Capital management update HCW has refinanced and increased its senior secured debt facility on improved terms and increased its hedging profile Transaction impacts on gearing Dec-22 $
Slide 31: Appendix A | HCW Portfolio Impacts
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx APPENDIX A | HCW PORTFOLIO IMPACTS 31 Northpark Private Hospital
Slide 32: $1bn Upsized development pipeline
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx $1bn Upsized development pipeline Healthscope portfolio acquisition increases HCW accretive development pipeline to $1bn = Healthscope committed brownfield capex pipeline: $255m 1 as-
Slide 33: HCW portfolio impact
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx HCW portfolio impact Portfolio statistics Standalone1 Post Tranches 1 & 22 Post Tranches 1, 2 & 33 Portfolio valuation4 $775m $1,505m $1,505m WACR 5.0% 5.1% 5.1% WALE 9.7 years 12.5 y
Slide 34: Appendix B | Tenant & Sector Overview
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx APPENDIX B | TENANT & SECTOR OVERVIEW 34 Knox Private Hospital
Slide 35: New relationship with Healthscope – Leading national operator
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx New relationship with Healthscope – Leading national operator Australia’s 2nd largest private hospital operator, with a track record of over 37 years Overview Australian private hospi
Slide 36: Attractive industry supported by positive industry fundamentals
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Attractive industry supported by positive industry fundamentals Long-term growth in private hospital admissions to be driven by population growth, demographic trends and increasing in
Slide 37: Attractive industry supported by positive industry fundamentals
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Attractive industry supported by positive industry fundamentals Private hospitals play a critical role in the Australian hospital industry given the significant and growing strain on
Slide 38: The acquired hospitals benefit from high barriers to entry
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx The acquired hospitals benefit from high barriers to entry and Healthscope benefits from its scale Barriers to entry ▪ Locations in key catchment areas required to attract patients Lo
Slide 39: Appendix C | Bonus Unit Worked Example
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx APPENDIX C | BONUS UNIT WORKED EXAMPLE 39 Northpark Private Hospital
Slide 40: Bonus Unit worked example
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Bonus Unit worked example Worked example for a Unitholder with 100,000 Existing Units that participates for their full pro-rata in the Placement and Entitlement Offer, and holds the s
Slide 41: Appendix D | Key Risks
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx APPENDIX D | KEY RISKS 41 Nepean Private Hospital
Slide 42: Key risks
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Key risks This section discusses some of the key risks associated with an investment in HCW. A number of risks and uncertainties may adversely affect the operating and financial perfo
Slide 43: Key risks
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Key risks Unlisted Fund may not proceed as expected As noted on page 7, the Unlisted Fund is being established to hold the assets the subject of Tranches 2 and 3, with HCW acquiring o
Slide 44: Key risks
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Key risks Analysis of the Acquisition by the Responsible Entity The Responsible Entity has undertaken financial, business and other analyses of the properties the subject of the Hospi
Slide 45: Key risks
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Key risks There is a risk that rental income may be materially different to that expected. Rental income may decline for a number of reasons, including as a result of failure of exist
Slide 46: Key risks
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Key risks Tenant concentration Whilst HCW has a diverse tenant mix, approximately 83% of the gross property income from its portfolio is generated from the top 20 tenants with Healths
Slide 47: Key risks
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Key risks Operators may impact investor perceptions of the industry HCW's portfolio contains properties operated by primary care, childcare and aged care providers, and hospitals. The
Slide 48: Key risks
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Key risks Environmental compliance costs and liabilities Environmental laws impose penalties for environmental damage and contamination which may be material. Whilst the nature of HCW
Slide 49: Key risks
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Key risks In the future, HCW may also need to access additional debt financing to grow its operations and its portfolio. If HCW is unable to refinance, repay or renew its debt facilit
Slide 50: Key risks
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Key risks Occupational health and safety There is a risk that liability arising from occupational health and safety matters at a property may be attributable to HCW as the landlord in
Slide 51: Key risks
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Key risks Risk of dilution or of failure to raise capital Unitholders of HCW may have their percentage security holding in HCW diluted by the Offer, and also by future capital raising
Slide 52: Appendix E | Summary of Equity Raising Underwriting Arrangements
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Appendix E | SUMMARY OF EQUITY RAISING UNDERWRITING ARRANGEMENTS 52 Northpark Private Hospital
Slide 53: Summary of Equity Raising underwriting arrangements
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Summary of Equity Raising underwriting arrangements Underwriting Agreement J.P. Morgan Securities Australia Limited and Macquarie Capital (Australia) Limited are acting as joint lead
Slide 54: Summary of Equity Raising underwriting arrangements
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Summary of Equity Raising underwriting arrangements j) HCW withdraws the Offer or any part of it or indicates that it does not intend to or is unable to proceed with the Offer or any
Slide 55: Summary of Equity Raising underwriting arrangements
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Summary of Equity Raising underwriting arrangements If either Joint Lead Manager terminates its obligations under the Underwriting Agreement, it will not be obliged to perform any of
Slide 56: Appendix F | Foreign Offer Restrictions
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Appendix F | Foreign Offer Restrictions 56 Knox Private Hospital
Slide 57: Foreign Offer Restrictions
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Foreign Offer Restrictions International Offer Restrictions This document does not constitute an offer of New Units in any jurisdiction in which it would be unlawful. In particular, t
Slide 58: Foreign Offer Restrictions
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Foreign Offer Restrictions Singapore This document has not been registered as a prospectus with the Monetary Authority of Singapore (MAS) and, accordingly, statutory liability under t
Slide 59: Appendix G | HMC sub-underwriting arrangements summary
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Appendix G | HMC sub-underwriting arrangements summary 59 Sunnybank Private Hospital
Slide 60: Summary of HMC sub-underwriting arrangements
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Summary of HMC sub-underwriting arrangements Summary of HMC sub-underwriting arrangements ▪ Home Consortium Developments Pty Limited (HCDPL), a wholly owned subsidiary of HMC Capital