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Case study: group restructure and acquisition - DCA Group

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DCA Group is a leading provider of eldercare, healthcare and diagnostic imaging services through its interests in the Agedcare Group (including the Amity Group), Retirement by Design and the I-Med network.

Deloitte Corporate Finance assisted DCA Group to restructure its operations by developing and refining the structure of a proposed transaction and performing due diligence on several recent acquisitions.

The transaction represented the second and larger of two stages to transform DCA Group's focus from property to eldercare, healthcare and diagnostic imaging.In the first stage, the Group acquired majority interests in aged care and retirement living facilities, as well as minority interests in a network of diagnostic imaging practices, and divested some of its property interests.

In the second stage, the Group was restructured to take a 100% interest in the diagnostic imaging network in exchange for shares and options in DCA Group. The impact of the second stage restructure in financial terms was to effectively double the size of DCA Group's market capitalisation on ASX.


DCA Group wanted to restructure the existing contribution from its investment in the I-Med network such that it would form the majority of the Group's revenue and earnings in future periods.

The restructure also involved the provision of a sell-down facility to allow the previous majority shareholders in the I-Med network to realise part of their recent investment in the new DCA Group shares acquired.

A further component of the restructure was the offer of bonus options in DCA Group to pre-transaction existing shareholders in the Group.

Significant challenges were posed by the need to structure the transaction to allow DCA Group to have 100% ownership of the I-Med network from a cash flow, taxation and accounting viewpoint whilst still maintaining clinical independence for the radiologists who were the previous majority shareholders in the I-Med network.

The number of parties impacted by the transaction was significant and the needs of all interested parties required careful consideration in the structuring of the deal.

The impact of the transaction on the Group's financial results and position was extremely significant, which meant that great care had to be taken in the presentation of the financial information in the offer document in order for it to be meaningful to all interested parties.

DCA Group had been highly acquisitive in recent periods, including the period leading up to the offer where the number of investments in joint venture companies in the I-Med network went from three to five, which entailed significant due diligence investigation.


Deloitte worked actively with DCA Group and its other advisers to develop and refine a structure for the transaction that took into account the needs of all interested parties and which allowed DCA Group to achieve its primary goal of restructuring its investment in the I-Med network without compromising clinical independence.

Deloitte was a key member of the team that performed due diligence on significant recent acquisitions by DCA Group.

Deloitte worked with DCA Group and other due diligence committee members in ensuring that appropriate financial disclosures were made in the offer document.


This transaction was a defining moment for DCA Group and fundamentally changed the nature of the Group's size and earnings profile.

The way in which the Group is viewed in the market has also changed in terms of its overall profile and that of its underlying business components.

The complexity of structuring the transaction required close teamwork by DCA Group and all its advisers and resulted in a positive outcome for key interested parties to the transaction.

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