Eldercare To Acquire Medical Laboratory Wellington

Eldercare To Acquire Medical Laboratory Wellington As First Entry Into Medical Services Sector

Auckland – October 26, 2001 – Listed healthcare provider ElderCare New Zealand (NZSE: ELD) today announced that it had reached agreement to purchase community pathology laboratory, Medical Laboratory Wellington, and its subsidiary, Nelson Diagnostic Laboratories.

Consideration for the purchase is $10.5 million, comprising $7.35 million in cash payable on settlement and $3.15 million in capital convertible notes issued over three years. Preliminary due diligence has been undertaken and a heads of agreement signed, with the balance of due diligence and contract completion expected in December.

The transaction represents ElderCare’s first medical services acquisition and complements its existing retirement, aged care and rehabilitation businesses. It is a significant step towards ElderCare’s stated intention, first signalled at the company’s annual meeting last year, to transition into a balanced healthcare and medical services provider.

Medical Laboratory Wellington has been in operation since 1932, offering a full range of medical laboratory testing to the public, requesting doctors, hospital outpatients and private hospitals in Wellington, Paraparaumu and Porirua. It is an IANZ registered laboratory and a Telarc registered supplier (ISO9002), servicing 400 General Practitioners, 94 medical centres and 30 private hospitals and nursing homes.

Nelson Diagnostic Laboratories serves 130 General Practitioners, 12 private hospitals and nursing homes in Nelson and Marlborough. Both facilities are full service community pathology laboratories, and the combined operation is one of the three largest in New Zealand.

Medical Laboratory Wellington’s Chief Executive and Managing Partner, Dr Clint Teague, will continue to head the company and will be appointed to the Board of ElderCare on completion of the acquisition.

“The community pathology market is worth an estimated $180 million per annum, and community laboratories form a core part of the primary healthcare delivery mechanism,” said ElderCare CEO, Alan Clarke. “Medical Laboratory Wellington and Nelson Diagnostic Laboratories are both substantial businesses with great experience, reputations and staff. Both will continue to serve their communities operating under their existing names and local management.

“The acquisition fits ElderCare’s strategy of acquiring well-managed, efficient healthcare and medical services businesses delivering to a high standard of quality, and keeping management in place.”

Last year the company initiated its expansion into the broader healthcare market with the acquisition of rehabilitation services provider, Ranworth HealthCare.

ENDS

Company Background
ElderCare New Zealand Limited (NZSE: ELD) is a healthcare provider. The company owns a substantial portfolio of nursing homes, assisted living and assessment and rehabilitation facilities throughout New Zealand. These offer an array of specialised services to cater for the healthcare needs of a broad range of New Zealanders. The company has embarked on a programme that will see it expand its operations into other complementary businesses in the wider healthcare sector.

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