Healthco Healthcare & Wellness Reit · ASX:HCW
Healthco Healthcare & Wellness Reit — Merger or Acquisition (March 2023)
60 slides from Healthco Healthcare & Wellness Reit'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 For personal use only Campbelltown Private Hospital Nepean Sydney Private Hospital Southwest Hospital Knox Private Hospital Northpark Private Hospital HealthCo Healthcare & Wellness REIT Transformational Acquisition
Slide 2: Acknowledgement of Country
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx For personal use only Acknowledgement of Country HealthCo acknowledges the Traditional Custodians of country throughout Australia and celebrates their diverse culture and connections
Slide 3: Presenters and Agenda
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx For personal use only Presenters Agenda Transaction overview David Di Pilla Will McMicking 1. Strategic rationale HMC Capital HMC Capital Group Managing Director & CEO Group CFO 2. Eq
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 For personal use only This presentation (Presentation) has been prepared by HCW Funds Management Limited (ABN 58 104 438 100, AFSL 239882) (Responsibl
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 For personal use only Future performance This Presentation contains certain “forward looking statements”. Forward looking statements can generally be
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 For personal use only In connection with the Offer, one or more investors may elect to acquire an economic interest in the New Units (Economic Interes
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 For personal use only ▪ HMC Capital (ASX: HMC) today announced that entities
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 For personal use only ~$1,200m1 Healthscope Hosp
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 For personal use only Northpark Private Hospital The Victorian Rehab Centre Pine Ri
Slide 10: Transaction overview: equity raising size and pricing
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Transaction overview For personal use only Equity raising ▪ The HCW Acquisition will be funded through an underwritten $320m equity raising (Equity Raising), comprising a $89m institu
Slide 11: Transaction overview: HMC transaction support
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Transaction overview For personal use only HMC transaction ▪ HMC Capital has agreed to improve HCW’s cost structure following the significant increase in the scale of the entity post
Slide 12: 1. Strategic Rationale
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx For personal use only 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 For personal use only Acquisition overview Geographic
Slide 15: Acquisition improves HCW's portfolio income profile
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 For personal use only Portfolio statistics Post acquisition portfolio subsec
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 For personal use only ENHANCED TENANT COVENANT SIG
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% For personal use only Acquisition NOI yield Acquisition unlevered IRR vs. comparable transactions
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 For personal use only Annual
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 For personal use only Gross asset value (G
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 For perso
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 For personal use o
Slide 22: 2. Equity Raising
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx For personal use only 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 For personal use only Offer structure ▪ $320m underwritten Equity Raising comprised of: − An institutional placement (Placement) to raise ~$89m, and − A 1 for 1.90 pro rat
Slide 24: Bonus Unit
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Bonus Unit For personal use only Ranking ▪ The New Units issued under the Placement and Entitlement Offer will rank equally in all respects with existing ordinary units on issue from
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 For personal use only Implied 5.4% ~8.9%1 $1.35 $1.35 1 for 28 discount to discount to Issue Issue Bonus
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 For personal use only Sources of funds $m Equity Raising 320 Identified Asset Sales1 125 Existing debt facilities 143 Total sources of funds 588 Uses of funds $m Acqu
Slide 27: Indicative timetable
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Indicative timetable For personal use only Event Date Announcement of Equity Raising Thursday, 30 March 2023 Institutional Placement and Entitlement Offer bookbuild Thursday, 30 March
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 For personal use only 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 For personal use only 1. 1 Settlement of Macquarie Park Acquisition completed in Mar-23 2. 2 Healthscope portfolio acquisition impacts including equity raise,
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 For personal use only Transaction impac
Slide 31: Appendix A | HCW Portfolio Impacts
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx For personal use only 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 For personal use only = Healthscope committed brownfield capex
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 For personal use only 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%
Slide 34: Appendix B | Tenant & Sector Overview
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx For personal use only 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 For personal use only Overview Au
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: High barriers to entry and Healthscope scale benefits
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 For personal use only Barriers to entry ▪ Locations in key catchment areas required
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 For personal use only 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 For personal use only Worked example for a Unitholder with 100,000 Existing Units that participates for their full pro-rata in the Placement and Entitlement
Slide 41: Appendix D | Key Risks
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx For personal use only 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 For personal use only This section discusses some of the key risks associated with an investment in HCW. A number of risks and uncertainties may adversely affect the operati
Slide 43: Key risks
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Key risks For personal use only 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
Slide 44: Key risks
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Key risks For personal use only Analysis of the Acquisition by the Responsible Entity The Responsible Entity has undertaken financial, business and other analyses of the properties th
Slide 45: Key risks
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Key risks For personal use only 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 resu
Slide 46: Key risks
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Key risks For personal use only Tenant concentration Whilst HCW has a diverse tenant mix, approximately 83% of the gross property income from its portfolio is generated from the top 2
Slide 47: Key risks
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Key risks For personal use only Operators may impact investor perceptions of the industry HCW's portfolio contains properties operated by primary care, childcare and aged care provide
Slide 48: Key risks
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Key risks For personal use only Environmental compliance costs and liabilities Environmental laws impose penalties for environmental damage and contamination which may be material. Wh
Slide 49: Key risks
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Key risks For personal use only 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
Slide 50: Key risks
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Key risks For personal use only Occupational health and safety There is a risk that liability arising from occupational health and safety matters at a property may be attributable to
Slide 51: Key risks
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx Key risks For personal use only 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
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 For personal use only 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 For personal use only Underwriting Agreement J.P. Morgan Securities Australia Limited and Macquarie Capital (Australia) Limited are
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 For personal use only j) HCW withdraws the Offer or any part of it or indicates that it does not intend to or is unable to proceed
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 For personal use only If either Joint Lead Manager terminates its obligations under the Underwriting Agreement, it will not be obli
Slide 56: Appendix F | Foreign Offer Restrictions
IBDROOT\PROJECTS\IBD-HK\KAURY2017\605978_1\IPO\Cornerstone presentation\2019.09.09 Amalfi Investor Presentation.pptx For personal use only 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 For personal use only International Offer Restrictions This document does not constitute an offer of New Units in any jurisdiction in which it would be unla
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 For personal use only Singapore This document has not been registered as a prospectus with the Monetary Authority of Singapore (MAS) and, accordingly, statu
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 For personal use only 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 For personal use only Summary of HMC sub-underwriting arrangements ▪ Home Consortium Developments Pty Limited (HCDPL), a wholly owned subs
HealthCo Healthcare & Wellness REIT — Merger or Acquisition (March 2023) on 6ix