Healthcare Locums plc
Healthcare Locums plc
Disposal of Homecare Division
Healthcare Locums plc ("HCL" or the "Company" or the "Group") announces that its wholly owned Australian subsidiary, Healthcare Australia Holdings Pty Limited ("HCA") has agreed to sell its Homecare Division to KinCare Health Services Pty Limited ("Purchaser") for A$34 million (approximately 22.2 million).
The sale is in line with the Board's belief that the Homecare Division is non-core to the business of the overall Group and reflects that the Homecare Division would have required further investment to realise its true potential. The disposal enables HCL to focus on the development of the core UK and Australian businesses and to realise value from non-core elements of the business. The net proceeds will be used to reduce the Company's debt.
The HCA business, which was acquired on 20 December 2010, comprised two principal parts. The core business is engaged in the provision of nursing agency staff, and accounted for approximately 77 per cent of the Australian business's revenue in 2010*. The Homecare Division, which accounted for approximately 20 per cent of HCA's revenue in 2010*, provides nursing in the home and support services to customers through the Stanhope brand and private homecare business, Private Care.
In the year ended 31 December 2010 the Homecare Division generated a turnover of A$44.7 million* (approximately 28.1 million), a gross profit of A$12.2 million* (approximately 7.6 million) and an EBITDA before extraordinary items of A$4.0 million* (approximately 2.5 million).
The sale is conditional upon a warranty and indemnity insurance policy being entered into, and certain consents to change in control being received. Under the sale agreement HCA has given the Purchaser certain warranties and indemnities and HCL has entered into certain covenants for the benefit of the Purchaser.
The transaction is expected to complete in July 2011. The full consideration will be payable in cash immediately thereafter but is subject to a post-completion audit of certain items and potentially therefore post-completion adjustment.
Peter Sullivan, Chairman commented:
"We are pleased to announce the sale of the Homecare Division. This is another step towards stabilising the business as it enables the Company to reduce its indebtedness to its senior lenders. The Board continues to work to finalise the audited annual accounts for 2010 and I look forward to updating stakeholders at the earliest opportunity."
* Based on unaudited management accounts for HCA for the year ending 31 December 2010.