HomeCo accelerates HealthCo Platform with $125m Cap Raise

4 December 2020
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HomeCo has today announced that it has agreed terms to acquire a portfolio of 6 health, education and Government services properties for a total initial investment of $62 million ($131 million total investment including fund-through contributions).

The acquisitions are consistent with HomeCo’s strategy to increase its exposure to health, wellness and Government assets.

The 6 assets comprise are predominantly childcare centres with 2 located in Sydney, 2 in Melbourne and one each in Brisbane and the Gold Coast. The assets are being acquired on a yield of 5.6% and with a WALE of 10 years. The Brisbane and Gold Coast assets include Medical and Government tenancies.

The acquisitions increase HomeCo’s Health, Wellness & Government exposure to over $400 million of assets and provide the scale to establish a second standalone fund which will be managed by HomeCo in the first
half of 2021.

Advisers will be appointed to assist with the HealthCo dual track process (private institutional selldown versus IPO) prior to the end of CY20204.

HomeCo Executive Chairman & CEO David Di Pilla commented, “The acquisitions announced today are an exciting step for HomeCo and increases our exposure to the opportunity rich Health, Wellness & Government sectors. Importantly, the establishment of the HealthCo REIT in early 2021, today’s $125 million placement and HomeCo’s newly formed Capital Partnerships Group will set the foundation for HomeCo to accelerate
growth in assets under management”

HomeCo has also entered into an agreement to acquire Gregory Hills Home Centre, NSW for a total consideration of $32 million which increases HomeCo’s exposure to the Western Sydney growth corridor.

HomeCo also today announced that it is undertaking a $125 million fully underwritten placement at an issue price of $3.80 (Issue Price) per new ordinary stapled security (New Security) to fund the acquisitions and
associated transaction costs (Placement). The Placement is fully underwritten by Goldman Sachs Australia Pty Ltd.

The Issue Price represents a:
▪ 2.6% discount to the last close price of $3.90 on 3 December 2020
▪ 4.0% discount to the 5 day VWAP of $3.96 on 3 December 2020

The transaction will increase HomeCo’s assets under management (AUM) to over $1.7 billion across 47 assets representing over 83% growth since IPO in October 2019 and further strengthens HomeCo’s funds management platform and accelerates its objective to grow AUM to $5bn in the medium term through capital recycling.