Presbyterian Care handover to Anglicare plus Bolton Clarke opco propco with Allity homes a sign of the future – and size will matter

The decision announced yesterday of the Presbyterian Church again handing over the keys to its aged care portfolio of business assets, including its Residential Aged Care, Retirement Villages and Home Care Services in the Sydney metropolitan area and New England area, coupled with Bolton Clarke selling nine of its newly-acquired Allity aged care homes in Adelaide for $220 million, points to boards looking to the future.

The Presbyterian move is an acknowledgement that aged care is a hard business, and consolidation is accelerating. We talk of the 800 aged care providers being as few as just 100 in as little as three years – and of those, 50 will be rural and remote and heavily subsidised by government. The remaining 50 will be battling it out for geographic market share.

Bolton Clarke selling its assets in an opco propco deal to an Australian Unity property fund to raise cash harks back to two years ago when its Chairman, Pat McIntosh AM CSC, advised Bolton Clarke had to double in size within five years to be competitive. They are nearly there.

As demonstrated by Presbyterian Care, there will be plum assets going cheap very soon, and Bolton Clarke, we assume, wants its cash reserve to be able to strike fast.

On this analysis, as many as 40,000 beds will change hands cheaply over the next 36 months.