Shares in health insurer nib Holdings went into a trading halt yesterday after revealing plans for a capital raising to fund a $155.5 million acquisition of corporate health insurance provider GU Health.
nib said the transaction will be funded by a fully underwritten institutional equity placement of $60 million, a non-underwritten share purchase plan of $15 million and a new debt facility for the balance. The issue will be made at $5.48 a share, a 5% discount to the last price of $5.77.
nib Managing Director Mark Fitzgibbon said the acquisition of GU Health was part of a push into the “corporate group market” and the company expects to complete the deal before the end of the year.
"The acquisition … adds materially to both our Australian residents and international health insurance businesses and hopefully, will help grow our nascent outbound business," Mr Fitzgibbon said.
"We have a strong view at nib about how globalisation increasingly demands that health insurers are able to seamlessly offer customers global cover."
GU Health is Australia’s only established specialist corporate group health insurer, with about 34,000 policyholders across more than 260 corporate clients.
It generated premium revenue of $193.5 million in the 12 months to June 30, and nib said the acquisition is expected to immediately add to earnings per share.
The institutional issue is expected to be completed today.