|
Web Page History |
|
|
|
||||||||||||||||
If we examine the material we have about the Australia's Macquarie banbk and also of other private equity groups like MFS then there are pointers to the way private equity operates in Australia - and paralells with the USA are suggested. We need more information - lots of it.
In the last few years Australia's Macquarie bank has enjoyed enormous success under new management with an aggressive market focus. Its strategy focused on growth by buying into profitable sectors across the world. Its shareholders reaped the benefits. It has embraced wrinkle ranching globally and its focus, as the reports reveal, has been entirely commercial and so it should be. But should it be allowed into an area where commercial success comes from removing more money, for its distant investors, from an already depleted system and then calling it productivity.
A major focus has been nursing homes and retirement villages. It has joined with construction companies, other trusts and the providers of nursing care and retirement services in a complex web of corporations nationally and globally. In Australia these include Tricare,Moran Health Care, Zig Inge, Retirement Services Australia, Regis and even BUPA - in the proposed purchase of medical insurer Medibank Private. Macquarie has also bought extensively into aged care in Canada and New Zealand - in the latter case in partnership with developer Forrester Kurts (FKP). It formed Macquarie Capital Alliance Group, a market listed private equity company to pursue these and other purchases.
One of its most controversial purchases
was the nursing homes of the not for profit Salvation army in Australia and
New Zealand, turning them into profitable
ventures.
Its main vehicle in aged care has been the nursing home trust Retirement
Care Australia.
It has
expanded
rapidly
into
aged care
facilities
across
the world.
Like other companies that adopted similar aggressive marketplace strategies it was hit hard by the downturn at the end of 2007 and during 2008. With its share price in decline it started reducing its exposure to the sector.
Macquarie Capital Alliance Group (which listed on the Australian Stock Exchange in April last year) has 98 per cent of a company called Retirement Care Australia.
Jul 2006 Retirement Care Australia
Turning grey power into profits The Sydney Morning Herald July 5, 2006
A consortium backed by Macquarie Bank has paid $125 million for the Salvation Army's aged-care hostels, nursing homes and retirement living units, further consolidating the highly fragmented aged-care industry in Australia.
Mar 2005 Macquarie, Retirement Care Australia and Tricare
---------------------------
A private company called Retirement Care Australia has been formed to house the assets, and the group's board is stacked with Macquarie Bank executives.
--------------------------
Upon transfer of ownership of the 14 facilities, TriCare, a specialist aged-care and retirement village provider, will provide management services. TriCare will also have a representative on the RCA board.
MacBank sallies into aged-care sector Australian Financial Review March 10, 2005
Mar 2005 The attraction - Going global into Canada
Leisureworld is based in Ontario and cares for more than 3200 residents in 19 facilities. The business will be housed within Macquarie Bank but could be spun off into one of its growing stable of listed infrastructure and investment arms.Macquarie Bank chief financial officer Greg Ward told The Australian Financial Review the bank was using its extensive network of fund managers and executives to scout for other assets in the aged-care industry around the world, as it recognised the highly lucrative nature of the business.
"We are long-term investors and managers of infrastructure and essential community assets, and what we like is the privileged nature of the [aged-care] asset. So this is high government regulation, stable revenue and cash flow," Mr Ward said.
-----------------------
The purchase of Leisureworld also includes a business called Preferred Health Care Services, one of Canada's leading providers of professionals for the private-care sector.
MacBank going grey Australian Financial Review March 23, 2005If you were an oldster, who'd you prefer to look after you, a Salvo or a merchant banker?
Apr 2005 From "about care" to "about profits" - the Salvation Army sale
Macquarie Bank's cash box, Macquarie Capital Alliance Group, trumpeted its first acquisition yesterday.
Old folks homes for Mac cash box The Sydney Morning Herald April 7, 2005Separately, the bank agreed to pay $552 million for Canada's largest private aged-care provider, Leisureworld.
Apr 2005 Investing in Canada
Casey moves closer to RSA goal Australian Financial Review April 12, 2005
Macquarie bank has been the most recent acquirer of aged care assets. The bank purchased assets in New Zealand, Canada and Australia. Expect the Macquarie team to package these assets into another Macquarie listed asset.
Jun 2005 Breadth of operations
AGED CARE SECTOR : The Ageing Time Bomb, Tick, Tick, Tick........Boom! Your Money Weekly June 9, 2005
"We are attracted to the aged care sector because it offers stable underlying revenue streams and predictable cash flows, primarily as a result of government funding and subsidies which in turn will support MCAG's ability to deliver returns to investors," Macquarie Capital Alliance chief Michael Cook says. The distinction is important.
Jun 2005 The attraction of aged care
Pitch for retiring types The Australian June 25, 2005
RETIREMENT Care Australia, 95 per cent owned by Macquarie Capital Alliance Group, will pay $186 million for 11 nursing homes and the lease on another property from the Moran Group.
Aug 2005 Buying from Moran and in New Zealand
The Moran Group will continue to manage about 1000 beds in these nursing homes.
--------------------------
RCA now ranks among the biggest three aged-care operators in Australia.
-----------------------
The bank then dove into the New Zealand age-care sector with a $NZ63.5 million deal for leading health-care and medical services provider ElderCare New Zealand.
Morans picks up $186m on 12 homes The Australian August 18, 2005Macquarie may also ally itself with Retirement Services Australia, owned by Richmond Football Club president Clinton Casey. Mr Casey plans to use his $140 million group as a platform to build Australia's largest aged-care business after listing.
Aug 2005 Aligning with Retirement Services Australia
Caring Mac buys 12 homes The Age August 18, 2005
Investment fund Macquarie Capital Alliance Group Ltd (MCAG) has scooped up 49 per cent of Zig Inge Retirement Villages Group for $100 million, bolstering its aged care presence.
Aug 2005 Buying up half of Zig Inge
MCAG, which is backed by investment bank Macquarie Bank Ltd, said today the founders of Zig, the Inge family, will retain a 51 per cent stake and day-to-day management responsibility.
---------------------
Mr Cook said it was possible that MCAG could take full ownership of Zig in the future.
Macquarie Capital acquires Zig retirement villages Australian Associated Press Financial News Wire August 31, 2005Zig Inge spans all facets of retirement village development and management in Australia. It owns and manages 15 villages, predominantly in Victoria as well as in NSW, the ACT and Queensland.
Sep 2005 Zig Inge
MacBank in move on Zig Inge villages Australian Financial Review September 1, 2005
GIANT Australian investment bank Macquarie has made its second foray into the aged-care sector in New Zealand, buying 11 rest homes from the Salvation Army.
Sep 2005 Buys Salvation army in New Zealand
The Australian investor is on a buying spree in the retirement business, having also snapped up ElderCare New Zealand for $63.5 million in May.
-------------------------
With this purchase, Macquarie will have nearly 1400 rest home and hospital beds in New Zealand as part of 25 aged-care facilities.The sale draws to a close the Salvation Army's 50 years in providing homes for the elderly.
SALLIES SELL REST HOMES TO AUSTRALIA Dominion Post September 7, 2005
FKP Property Group and Macquarie Bank have snared a critical 60 per cent shareholding in their $NZ341 million ($317 million) takeover bid for New Zealand's largest retirement group, Metlifecare, after upping their offer.
Oct 2005 Forrester Kurts and Macquarie buy retirement villages in NZ
---------------------
Fewer not-for-profit organisations were in the retirement home industry. "It tends to be more corporatised than in Australia; it's a much cleaner model because of that."
FKP, Macquarie find a home in NZ Australian Financial Review October 20, 2005
The partners have a pre-bid agreement with Private Healthcare and Todd Lifecare to acquire their combined holding of 60 per cent of Metlifecare's shares.
Oct 2005 Buying Metlifecare in New Zealand
--------------------
If the deal proceeds as planned, Australian investors, led by Macquarie Bank and its subsidiaries, will have spent almost $1.75 billion on retirement villages, mostly overseas, so far this year.
---------------------
The vehicle for the bid is Retirement Villages New Zealand, a 50-50 joint venture between Macquarie and the Brisbane-based FKP.
MacBank and partner mine old gold in NZ The Australian October 20, 2005
In Australia, it (Macquarie) is believed to be acting as adviser to, and potentially joint buyer with, health insurer BUPA, which is looking to acquire parts of Medibank Private if the Australian Government privatizes the entity.
Dec 2005 Interest in buying Medibank with BUPA
Macquarie builds up its health Herald Sun (ABIX abstracts) December 29, 2005
Rival Macquarie Bank last week bought Clinton Casey's Retirement Services Australia for $60 million.
Jun 2006 Buys Retirement Services Australia
Industry sources said that was the first in an expected series of acquisitions that would form the basis of a mega listed trust.
Babcock says ageing 'no cottage industry' Australian Financial Review June 23, 2006The shareholders of Retirement Care Australia (RCA) are:
Sept 2006 MCAG ownership
- Macquarie Capital Alliance Group (MCAG), an ASX listed investment fund; and
- Tricare, a recognised aged care provider.
MCAG is managed by a member of the Macquarie Bank Group. MCAG holds a 98% interest in RCA, with TriCare holding the balance.
Retirement Care Australia web site accessed September 2006
Macquarie’s management style is interesting. We need to ask about the meaning behind the words used. Is "best practices" really about care or about financial management? Can you respond to the personal needs of individuals when you run large numbers of nursing homes as one unit?
The argument is that aged care is not as Macquarie suggests below "like any other business". It is very different and a humanitarian service - not really a business at all.MCAG chief executive Michael Cook says the key to success with aged-care assets is, like in any other business, good management, investing in the future and scale.
Aug 2005 The key to success
"Running a large network of facilities using aged-care best practices gives operational efficiencies," he says.
"We run them as one unit, which gives advantages in procurement and the way we operate the business in terms of staffing, rostering and training."
Having big bucks behind you is also an advantage. "Our plan is to heavily invest in the facilities we've acquired over some years. That will involve development of sites, through rebuilding, expanding or improving," Cook says.
Rich gains mean more care about aged care The Age August 10, 2005
Macquarie did not run the nursing homes itself. Retirement Care for instance contracted the operation of the homes to Tricare or Moran Health Care. When we look at their web site prior to 2008 we wondered how this central control operated and what latitude these operators had. The web site claims that it is Retirement Services which supplies all of these services and promises so much to residents. Yet this is a commercial entity and it subcontracts that to others. How do these commercial arrangements work and how does Retirement Care Australia enforce and supervise the groups to whom it contracts. I can't see Doug Moran being told how to run his homes. Are the on site management teams referred to from Retirement Care Australia or from some other company? Customers need to know who is directly responsible for what happens to them and what their track record is.
Our approved provider regulations are based on the suitability of the provider and pretend that the owner has no influence on management. Any criminal can own nursing homes. In this instance the approved provider is Tricare, Moran etc. Yet here we have an owner Retirement Care Australia indicating quite clearly (see below) that it is responsible for the care and so clearly controlling these contractors and telling them what to do. Macquarie makes its profits from these nursing homes. It is ridiculous to suggest that it does not exercise control to ensure that they are profitable and that their operation is adjusted when they are not. The regulations are a farce.
ABOUT RETIREMENT CARE AUSTRALIA
Jun 2006 Retirement Care Australia
Retirement Care Australia owns and operates 26 aged care centres (retirement villages and nursing homes) located in New South Wales, Victoria, South Australia, Western Australia, Tasmania, Queensland and the Northern Territory.
Through these facilities, Retirement Care Australia offers a wide range of comfortable and secure living options to over 3,500 older Australians comprising Low Care (Hostel) Facilities, High Care (Nursing Home) Facilities and Independent Living Units for active retirees.
----------------------------
Qualified nursing teams are supported by personal carers, with each staff member committed to ensuring that every resident enjoys a happy and fulfilling life.From nutritious, tasty meals and access to quality health care services, through to stimulating activities and outings, Retirement Care Australia centres provide a home-like environment that promotes independence and dignity for every resident.
---------------------------
FACILITY MANAGEMENTEach Retirement Care Australia Centre is managed by professional, qualified and caring teams of people experienced in the delivery of aged care services.
At each Retirement Care Australia location our on-site management teams provide a secure and supportive environment, catering to the needs of each resident's physical, emotional and social needs.
---------------------------------
Retirement Care Australia’s vision is to be recognised as the aged care provider that continually sets new standards in care and accommodation quality, innovation and the skills and commitment of its staff.As part of this vision we are committed to investing in our people, our systems and the aged care communities we manage. Our aim is to nurture an environment of trust, harmony and mutual respect, where responding to the needs of residents is the priority.
We strive to deliver a strong sense of "home" - where comfort, security, companionship and belonging are the essential ingredients.
Residents enjoy wholesome, appetising meals. They are offered a range of recreational and social activities that are both stimulating and entertaining, and nursing and personal care is delivered by professional staff who are committed to the health and well-being of all residents.
Retirement Care Australia’s web site accessed June 26, 2006
On the web page about private equity and banks I used Macquarie's management style (in this case in its Canadian facilities) and lack of contact with the world of the nurses at the bedside as a graphic illustration of the way in which private equity distances itself from the bedside and so resorts to a form of managerialism that has adverse consequences for frail residents
Contrary to the claims of politicians, there is a crisis in aged care in Australia. We have a disconection between politicians and the expectations of the public in regard to aged care. The care the elderly get is not what the public wants, expects or should have and this is because we have too few and too unskilled a nursing force - disillusioned and increasingly unmotivated and apathetic. Other opportunities are drawing staff away from nursing. We should be encouraging nurses into the sector, increasing their pay and increasing skills levels.
Remarkably we have a system where nurses are seen to be a drain on profits and where every effort is made to have fewer of them and use less skill. Nursing salaries are the largest cost in nursing homes and any cost cutting must include nurses. The game is to cut staff while maintaining sufficient process and documentation to avoid the accreditation body's attentions.
While on the one hand the companies pay service to getting more nurses by offering scholarships and training, on the other they seek to drive down salaries and sideline the nurses representative bodies. These are the only channels through which nurses can safely address their concerns about care and the way thay are treated. These business practices alienate the staff, destroying morale.
This became apparent soon after they bought the Salvation Army's money losing nursing homes. Negotiations with unions soon broke down. RCA sought to split the nurses from their unions. What we have below is the unions take on this. They have their own axe to grind. It nevertheless illustrates the markets mechanistic and manipulative approach to the nurses. There is no empathy or encouragement to provide caring service here. If is nurses are mistreated it will be passed on down the pecking order. It is little wonder care suffers.
June 2005 Nurses mishandled raising their suspicions - for "affordable" read "profitable"
Launceston's Tyler Village aged care facility's new owners yesterday blamed a clerical error for more than a dozen staff presuming that they had lost their jobs.
----------------------------
Disgruntled residents said that the supposed clerical error was symptomatic of the way that the Tyler Village sale had been handled since the Salvation Army announced three months ago that the Launceston facility had been sold along with 15 other Salvation Army aged-care sites around Australia.
------------------------
More than 100 elderly residents have signed a petition circulated by fellow resident Patricia Rigby, which she sent with a letter to Salvation Army national headquarters last Friday accusing it of letting RCA make staffing decisions even before the group had taken over the site. "Before they have even taken ownership, RCA has caused so much uncertainty and stress to residents and staff alike so why would we think that it will improve when ownership transfers to them?" Ms Rigby said.
- Staff members are concerned that the RCA contracts will also mean that -
Some staff hours will be cut dramatically - one therapist's hours would be slashed from 44 hours to 21 hours a fortnight under her proposed contract.- A few staff have more than their current hours.
- Some staff have been incorrectly classified, with one health worker getting a maintenance employee's contract.
Mr Toohey said that the Salvation Army had admitted that it was getting out of aged care because it couldn't afford it.
"We are trying to put rosters in place that will be affordable and provide the maximum care," he said.
Retirement Care Australia Tyler Village in disarray Aged Care Connect June 26, 2005 http://www.nursinghomes.com.au/nhnews084.php
Jan 2007 Conflict with unions
If workers in the health and aged care industries believed that they were not going to be touched by Howard's unfair IR laws then they need look no further to their colleagues employed by the mega rich Macquarie Bank owned aged care chain Retirement Care Australia (RCA).
----------------------
Negotiations began with management creating a Joint Consultative Team (JCT) made up of employee and management representatives. - - - - - - - It quickly became apparent that the company wanted to bring conditions down to the legal minimums that John Howard's Workchoices legislation provides. In November the company stopped talking to the Unions.
----------------------
The company restarted the JCT and locked the unions out. This was a deliberate act by RCA. This was against the JCT's constitution which says Union reps must be present for a quorum.
Major Aged Care Employer Seeks to Slash Conditions Under Howard's New Worklaws. Health and Community Services Union Tasmania January 25, 2007 http://www.hacsutas.asn.au/news/334.html
Jan 2007 Staff pressured
Hundreds of aged care staff will consider a pay offer today which their union claims would reduce their holidays and cap pay rises at half the inflation rate. The pay deal involves more than 600 WA staff at homes run by Retirement Care Australia.
--------------------------
" They have told staff that if they don't accept the agreement that they are not required to pass on any pay rise. There is no carrot to entice workers to accept the agreement, just a stick to scare them into it," union secretary Dave Kelly said.
---------------------
The national offer released yesterday will increase pay annually at the same pace as the Commonwealth Own Purpose Outlays, which over the past four years has risen at about half the inflation rate at only 1.7 to 2.3 per cent. Mr Kelly said all other aged care providers applied pay rises at least equal to the inflation rate.
Pay offer to aged care workers un-Australian, says union The West Australian January 26, 2007
Feb 2007 Unions bypassed
Workers at seven centres owned by Macquarie Bank-offshoot Retirement Care Australia have voted to accept a new three-year agreement after talks between the company and unions failed. The agreement includes a 5 per cent pay rise in the first year, followed by rises of 2 per cent a year thereafter, however health unions attacked the deal.
Aged- care centre staff give nod to agreement Australian Financial Review (Abstracts) February 12, 2007
Oct 2007 Another example
The staff were offered five weeks notice with no redundancy provisions.
They were not told whether their entitlements would be paid out, the Health Services Union's (HSU) Victorian branch revealed.
------------------
The union has taken the matter to the Australian Industrial Relations Commission for a hearing related to the staff's entitlements.
Melbourne nursing home staff sent home AAP: October 20, 2007 http://www.agedcarecrisis.com/index.php/news/68-media/2306-melbourne-nursing-home-staff-sent-home
In 2007 RCA decided to relocate residents with dementia in order to redevelop the old Salvation army Hollywood facility at Nedlands in Western Australia. This resulted in a public outcry in which politicians became involved. It also brought out allegations and deep resentment about the extent to which RCA had restructured staffing at the expense of the care of residents.
Apr 2007 Development and dementia conflict
Thirty-six elderly residents with dementia are being evicted from Hollywood Village, say their relatives.
Families have been told to find new homes for the residents by June 1 and move them by December 1.
Some of the residents are in their 90s.
Some families said they paid $190,000 bond for a place at Hollywood Village and expected their relatives would be able to stay there for the rest of their lives.
--------------------
The Warrina dementia unit was built only nine years ago, say the relatives, who asked for their names not to be published. "It was state-of-the-art then; now they are saying they have to demolish it," one woman said.
------------------------
" I agree with relatives, it is a lovely unit. I totally understand what they were saying, they are not impressed." (company exec)
Warrina and other buildings on the south-west corner of the site will be demolished to make way for a new 300-bed, three-storey residential aged-care facility costing about $60 million.
-----------------------
It plans to sell three-quarters of the Hollywood Village site to the Zig Inge Group, in which MCAG has a half-share.
Old patients told to get out POST Newspapers April 7, 2007
Apr 2007 Moving demented patients nursing issues
Liberal MP Sue Walker says she is going to the top to tell Prime Minister John Howard about the plight of 36 dementia patients being forced out of their home in Nedlands.
She said she was not satisfied the company that owned the site could not build new accommodation elsewhere on the site before it demolished the Warrina building, where the dementia patients live.
-----------------------
At the same time former Labor federal health minister Carmen Lawrence joined the chorus of complaints about the treatment of patients who are being moved to make way for the redevelopment of Hollywood Village.
------------------------
She (Lawrence) criticised the company's suggestion that moving the dementia patients was the least disruptive way to redevelop the site.
"It is insulting, apart from being careless," she said. "People with dementia are often very frail physically.
"One of the things they find very difficult is finding familiar cues."
She said moving dementia patients could have grave consequences.
Frank Schaper, chief executive of the Alzheimers Association, said: "I am appalled by the fact that they have chosen those 36 as the group to move.
---------------------------
Union boss Sue Lines slammed Retirement Care Australia for putting profits before people.
She said the decision to close the dementia unit came just two months after the company forced workers on to a non-union work agreement.
Ms Lines, assistant secretary of the Australian Liquor, Hospitality and Miscellaneous Workers' Union, said Residential Care Australia, which was mainly owned by the Macquarie Bank, had broken the bond between carers and residents.
---------------------------------
When Hollyood Village was run by the Salvation Army, it had been a 100% union membership workplace, she said. There had been more than 100 staff. Since then numbers had been run down.
" There is no continuity of care," she said.
-----------------------------
She said the union had represented care workers, kitchen staff, cleaners and nurses at the village.
" Some left in disgust when the Salvation Army sold it," she said.
As union members left, the village employed non-union agency staff who changed from day to day and were not able to build up a relationship with residents, she said.
Walker alerts PM to aged evictions ??? source April 21, 2007
The pressure on nurses ultimately went too far and had its inevitable consequences for care at a facility in Victoria. The home was finally closed and the nurses treated in the usual cavalier fashion. No explanation for this is offered in the press. Other owners of nursing homes have targeted nurses when they complained and triggered an investigation or a surprise accreditation visit. Did this happen here? Could this be payback?
May 2007 Care suffers
A PRESTON nursing home remains open despite an aged-care watchdog's concerns about medication handling, care of wounds and a lack of privacy for the 44 elderly residents.
Preston and Districts Nursing Home in Benambra St failed to meet 18 of 44 criteria during an inspection by the Aged Care Standards and Accreditation Agency in February this year.
----------------------
The home failed to meet criteria on medication management, skin care, emotional support, privacy and dignity, living environment, laundry standards and complaints processes
The agency's report on the home states:
- "The home has ineffective processes and systems in place to monitor the safe delivery, storage and administration of medication . . . staff do not comply nor have understanding with the medication administration system."
- "Staff state that on many occasions the registered nurse division one does not have time to dress all the wounds. Residents and representatives confirm . . . their wound care is often neglected or delayed."
- "The living environment does not support privacy. Confidential conversations are not conducted in private. Staff do not knock on residents' doors before entering. Residents' dignity is compromised during feeding and rising times."
There were not enough staff to provide consistent care for residents and information was not always kept confidential.
An agency spokeswoman said it could revoke homes' accreditation, which put a stop to crucial federal funding, but could not close homes or change their management. "The agency is satisfied the home will undertake continuous improvement," the spokeswoman said.
The home is owned by Retirement Care Australia and operated by Moran Health Care Group.
Aged home given time to improve Preston Leader May 16, 2007
Oct 2007 Now closed
A DISGRACED Preston nursing home is to close in December. Preston and Districts Nursing Home in Benambra St is the second aged care home in Preston to announce its closure in two months.
---------------------
Earlier this year, Preston and District's nursing director was dismissed after the home failed 18 of 44 criteria in an inspection by the Aged Care Standards and Accreditation Agency.
Home shuts doors Preston Leader October 24, 2007
Oct 2007 Another example of a clash with nurses
The staff were offered five weeks notice with no redundancy provisions.
They were not told whether their entitlements would be paid out, the Health Services Union's (HSU) Victorian branch revealed.
------------------
The union has taken the matter to the Australian Industrial Relations Commission for a hearing related to the staff's entitlements.
Melbourne nursing home staff sent home AAP: October 20, 2007 http://www.agedcarecrisis.com/index.php/news/68-media/2306-melbourne-nursing-home-staff-sent-home
The situation in which RCA marketed itself as responsible for providing good care but then contracted it to a number of different providers including Moran and Tricare was never going to work satisfactorily. There were two experienced doctor administrators on RCA's board. Both had experience with government and charity organisations and they must have found this very worrying. Regis had been looking for a partner with deep pockets. It had a good track record for care.
In May 2007 Macquarie and Regis merged buying out Tricare's share of RCA. It would operate under the name of Regis. Regis was to own the larger share and would take over the management of all the facilities. The company was now the second largest private operator in Australia, managed 3600 beds in 37 facilities and was valued at $220 million.
One wonders how the Regis culture and the focus of the
two doctors will survive under the pressures of the Macquarie management
machine.
Once again we see the myth of scale trotted out for a sector where care is
individual and based on personal one on one care, so that scale has marginal
benefit. Its economic benefit comes from using it as a justification for reducing
staff and so compromising care. Will the new group be forced into this mode
of operation?
May 2007 RCA merges into Regis
Aged care groups the Regis Goup and Retirement Care Australia have signed a merger agreement, according to a statement today from Macquarie Capital Alliance Group, which owns 98 per cent of RCA.
To complete the deal, MCAG agreed to acquire the two per cent balance of RCA from TriCare.
------------------------
"The merger achieves MCAG's publicly stated goal of internalising management of the RCA facilities," he (MCAG chief executive Michael Cook) said.
-----------------------
Following the merger, Regis will own 54 per cent and MCAG will own 46 per cent of the entity.
The group will be known as Regis, and bring together 19 RCA facilities in Queensland, NSW, Victoria, South Australia and Western Australia and 18 facilities owned by Regis in Queensland and Victoria.
The facilities will be managed by Regis, which will become the second largest private aged care operator in the nation.
Retirement Care Aust merges with Regis, MCAG says Weste Australian Business News (AAP) May 16, 2007 http://www.wabusinessnews.com.au/dailyenews/
May 2007 Consolidation
The deal is the latest in a wave of consolidation that has swept through the sector and will give the listed Macquarie Capital a 46 per cent, or $151 million, equity stake in the combined entity, to be named the Regis Group.
Mac and Regis in aged-care merger The Australian May 17, 2007
Within months of the merger Regis were accused of using the Howard governments contentious workchoices legislation to dump staff.
Regis has been a fairly responsible organisation in the past. The manner in which it closed a home and dealt with staff is an indication of what we can expect from private equity groups like Macquarie as they bring in their profit focused managers to "turn unprofitable facilities around" and dump those they can't. Macquarie now owns Regis. The nurses allege that it had no hesitation in using the Howard government's unpopular work choices laws to reduce the cost of doing so. Nurses were pushed out of their jobs without notice 2 months before the home was supposed to close. If they treat their staff like this, what happens to the residents?
Staff at the Regis Group-owned Preston and District Nursing Home were informed this morning that the facility was closing at noon today and that they were to be sent home. The staff were offered 5 weeks notice with no redundancy provisions and no mention of whether their outstanding entitlements would be paid out.
Oct 2007 Macquarie closes home acquired from Regis
The facility had been earmarked for closure on 14 December and staff had been approached by management with offers of redeployment to other facilities owned by the group. Staff in consultation with the Health Services Union, were in the process of responding to the offers when told of the closure.
---------------------------------
The reason given for the closure was that too much work was required on the facility to bring it up to the standards required by the new federal government certification. In other words it was not cost effective.
-----------------------------------
The closure of the facility that is owned by the powerful Regis Group, itself taken over by Macquarie Bank earlier this year, indicates the parlous state of aged care in this country with for profit organisations taking over vital community services and closing them down if they are not profitable.
Macquarie Bank owned Aged Care provider uses Workchoices to dump staff with 90 minutes notice MEDIA RELEASE Health Services Union, Victoria The Age October 19, 2007
Macquarie bank started losing money in 2007 and was hit hard by the financial crisis of 2008. Share prices dropped. Whether this has filtered down to cost cutting in Regis nursing homes is not known. We do not have enough transparency and readily available material and it is too early to tell.
What Macquarie did try to do was to sell off the villages it had bought from Zig Inge and then to delist from the stock exchange. It involved several other private equity groups in the new company. This now owns just under half of Regis. Regis will be under pressure to perform to their expectations.
Jun 2007 Trying to sell Zig Inge
The listed Macquarie Bank private equity fund Macquarie Capital Alliance Group may soon put its 49 per cent stake in Zig Inge, which runs retirement villages in Queensland, NSW the ACT and Victoria, up for sale. The bank's potential exit from Zig, which analysts estimate has an enterprise value of about $475 million, has surprised the industry, since it bought the stake only two years ago, but is expected to attract interest from several major institutions - - - - .
Mac fund flags early retirement of Zig stake Australian Financial Review (Abstracts) June 29, 2007
Aug 2007 Losing money before the crash
Macquarie Capital Alliance Group for the year ended June 30, 2007 announced a net loss of $60.8 million on revenue up 75 percent to $487.3 million.
MACQUARIE CAPITAL HAS $61M LOSS Australian Company News Bites August 30, 2007
June 2008 Delist and privatise
The securities of Macquarie Capital Alliance Group (MCAG) rose more than 50 per cent today after its independent directors recommended a proposal to delist and privatise the private equity fund.
---------------------
The offer is being made through Macquarie Advanced Investment Group (MAIG), an entity backed by a consortium of private equity firms and MCAG.
The consortium comprises AlpInvest Partners NV, HarbourVest Partners, Pantheon Ventures, Partners Group, Paul Capital Partners, Portfolio Advisors and Procific.
"The consortium investors have among them over $US25 billion ($A26.6 billion) of funds applied to secondary private equity investments," Brett Gordon, principal of HarbourVest said.
------------------------
MCAG chief executive Michael Cook said the offer followed a review by the fund of its options, which included going private or selling assets.
"Unfortunately in the current market it has not been possible for MCAG to achieve security price growth," he noted.
Macq Capital independent director recommend privatisation Australian Associated Press Financial News Wire June 16, 2008
Jun 2008 Failed to deliver
MACQUARIE Group and a syndicate of investors will spend $836 million to buy back the shares of listed private equity vehicle Macquarie Capital, leaving original investors out of pocket, in a move that appears to signal the death knell for listed buyout funds and might also signal a winding back of the listed funds model.
The fund was launched in April 2005 at $4 a share as the private equity boom gathered pace, fuelled by cheap funds and a seemingly inexorable rise of the share market, but like many of its imitators -- including Allco Equity Partners and Babcock Capital -- it failed to deliver on its promise to investors.
-----------------------
Now with listed investment funds and financial engineering groups being shunned by investors, Macquarie has decided to take the fund private in the first of what observers think might be a string of privatisations.
---------------------------
The offer is being made by the Macquarie Advanced Investment Group, which is backed by a consortium of private equity firms.
Macquarie buries listed PE model The Australian June 17, 2008
Jun 2007 More details
THE most alarming aspect of the proposal to take Macquarie Group's listed private equity offshoot Macquarie Capital Alliance Group (MCAG) private is the extent to which the global credit market squeeze, induced by the sub-prime crisis, has savaged asset values.
MCAG's independent directors have agreed to recommend a scheme under which MCAG will be acquired by another Macquarie entity, Macquarie Advanced Investment Group (MAIG) for $3.40 cash per MCAG stapled security or one unlisted stapled security in MAIG for each MCAG stapled security. The offer values MCAG at $836 million.
----------------------
MCAG will be put into a new unlisted fund, Macquarie Advanced Investment Partners (MAIP), to be managed by Macquarie Capital. That will enable a longer-term focus than is possible with a listed vehicle.
Delist and grow: Macquarie Capital fund decides to go private in an effort to lift asset value The Australian June 17, 2008
Retirement Care Australia’s web site is http://www.retirementcareaustralia.com.au/
Further matters relating to the merged company will be addressed on the Regis web page.
Click Here to go to the www page about Regis.
For Updates:- A good way to check for recent developments in aged care is to go to the aged care crisis group's search page and enter the name of the company, nursing home or key words relating to any other matter in the search box. Most significant press reports are flagged there. The aged care crisis web site has recently been restructured and some of the older links used from this site may not work.
|