Healthcare of New Zealand Holdings, the country's biggest provider of homecare support, wants a bigger share of Auckland, where it's under-represented with the acquisition of Geneva Healthcare for an undisclosed sum.
The Wellington-based company, which recently sold a 40 percent stake to Australia's Quadrant Private Equity, wants the Commerce Commission approval for the deal to proceed after winning competitive sales process. The antitrust regulator has to determine whether approving the transaction will lead to a substantial lessening of competition in the market.
"Healthcare NZ sees the acquisition as adding scale that will enhance its capability to continue its drive to provide services in the most cost-effective way it can," it said in its application. The two biggest benefits would be expanding the company's national footprint especially in Auckland, and by acquiring Geneva's IT and training systems which are "superior to those currently in use by Healthcare NZ that could usefully be employed throughout the whole organisation."
The amalgamation of the two home and community support service companies comes on the eve of the government's $2 billion pay equity deal for 55,000 aged and residential care workers.
Healthcare NZ is the biggest provider of home and community services, and while its application redacted the revenue of the two companies, Healthcare's was more than the second-biggest provider owned by NZX-listed Green Cross Health Group, Access Homehealth, with $110 million, or 19 percent. The third largest player is not-for-profit Presbyterian Support with turnover of $35 million.
The company played down competition fears, saying there were many providers and that the funders - Accident Compensation Corp and district health boards - have numerous options to choose from.
"Moreover, the funders can and do structure their contracting behaviour to achieve their goals," the company said. "The acquisition will not materially impact funders' ability to constrain Healthcare NZ in the future."
If the deal doesn't get approved, Healthcare surmised Geneva will continue to operate as an independent business under different ownership given the sale attracted other bidders.
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