12 Oct 2020

Abano Healthcare revenue recovery spurs increased takeover offer

6:21 pm on 12 October 2020

As Covid-19 restrictions eased a strong recovery in business and improved earnings outlook for dental company Abano Healthcare has resulted in an increased takeover offer.

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The joint venture of Australian investment firm BGH Capital and the Ontario Teachers Pension Plan has raised its offer to $4.75 a share from $4.45. The increase follows Abano's release of group revenue figures for the first four months of its new trading year, showing returns are up 9 percent on a year ago.

It said bookings, new clients, and appointments for the Australian based Maven business and New Zealand's Lumino practices had rebounded strongly since lockdown restrictions were eased or removed.

"The board believes that the business is on track to make a full recovery from the impacts of Covid-19 over time. However there may be risks of further adverse impacts from Covid-19 in the near term," Abano said in a statement to the stock exchange.

It said it was now expecting full year underlying operational earnings of $32 million, with a further boost from $10.2m in government wage subsidies.

Abano said it had told the independent advisors on the bid about the improvement in trading, and after further discussions with the bidders the takeover had been raised.

An original offer of $5.70 a share was withdrawn at the end of March as the company was forced to shut much of its business because of Covid-19 lockdowns.

A new, lower offer was made in August.

Abano's directors gave their backing for the new offer, in the absence of anything better, but warned if the offer did not go through the company would need to raise extra capital to strengthen its finances and reduce its debt.

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