ADVANCED HEALTH LIMITED - Detailed Terms Announcement regarding investment in METWEST

Detailed Terms Announcement regarding investment in METWEST

ADVANCED HEALTH LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2013/059246/06)
(“the Company” or “Advanced Health”)
ISIN Code: ZAE000189049        JSE Code: AVL

DETAILED TERMS ANNOUNCEMENT REGARDING INVESTMENT IN METWEST


1 INTRODUCTION AND BACKGROUND TO THE TRANSACTION
    Shareholders are advised that as per the Share Sale Agreement dated 1 April 2019 between
    Presmed Australia Pty Limited (“PMA”), in which Advanced Health currently owns 59.66%, and
    Hereward Pty Ltd (Hereward/Metwest Surgical/day hospital) and Kingham Pty Ltd
    (Kingham/consulting practice/Metwest Eye Centre), (collectively “METWEST”), PMA exercised
    its second call option to acquire a further 19% interest in both Hereward and Kingham for a
    total Transaction consideration of AUD2,269,714 (approximately ZAR25 261 917) (the
    “Transaction”).

     PMA previously had a non-controlling interest of 38% in both entities. Following the
     Transaction, PMA’s total shareholding in both Hereward and Kingham has increased to 57%
     respectively.

2 BACKGROUND TO HEREWARD AND KINGHAM
    METWEST consists of an ophthalmology consulting practice (Kingham) and a day hospital
    (Hereward), both located on the same premises. There are six consulting suites, feeding
    surgery into a one theatre specialised ophthalmology day hospital, with 12 ophthalmologists
    consulting at the consulting practice, and 13 ophthalmologists operating at the day hospital.
    METWEST has been in existence for almost 30 years, with both Kingham and Hereward being
    well established, profitable and located in highly sought area in the north west Sydney area.

3 RATIONALE FOR THE TRANSACTION
    METWEST is the only ophthalmic specific private day hospital in the area, and PMA recognises
    the opportunity to add further value to this business, assist it with further growth and
    therefore further bolt it on to PMAs day hospital portfolio. Of the 13 surgeons operating at
    METWEST, a number of these surgeons concurrently work at other PMA facilities, ensuring
    strong collegiate connections between PMA and METWEST.

     PMA sees this as an exciting opportunity to increase its shareholding, now becoming the
     majority shareholder, in both profitable and well-established entities, and therefore increase
     PMA’s attributable EBITDA and consolidated profits. This will assist in placing PMA in a
     stronger position within an ever-changing day hospital environment.

4 KEY TERMS OF THE TRANSACTION

   4.1 Transaction consideration
       The total Transaction consideration of AUD2,269,714 (approximately ZAR25 261 917), was
       settled in cash by PMA.
   4.2 Conditions precedent and Effective date
       The effective date of the Transaction was 9 November 2021. At the date of this
       announcement, there are no outstanding conditions precedent to the Transaction, as all the
       conditions precedent were fulfilled.

   4.3 Warranties and indemnities
       The Transaction agreement contains legal warranties and indemnities which are considered
       normal in respect of a transaction of this nature.

   5. PROFIT AND NET ASSET VALUES ATTRIBUTABLE TO METWEST
      The net assets of METWEST as per the unaudited financial statements for the 12 months
      ended 30 June 2021, were AUD9,259,583 (ZAR103.1 million). The profit after tax attributable
      to the net assets of METWEST for the same period were AUD1,861,587 (ZAR20.7 million).

       The unaudited annual financial statements for METWEST were prepared in accordance with
       Australian Accounting Standards and Interpretations.

   6. CATEGORISATION OF THE TRANSACTION
      The Transaction constitutes a category 2 acquisition for the Advanced Health group, in terms
      of the Listings Requirements of the JSE Limited and is therefore not subject to Advanced
      Health shareholder approval.


Johannesburg
11 November 2021

Designated Advisor
Grindrod Bank Limited

Date: 11-11-2021 11:00:00
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