Meet Australia’s newest Rich Lister: The Croft family reveal how they sold their aged care business for $250 million this week
Victoria’s Croft family has struck it rich in a deal with healthcare giant Bupa to buy its aged care business, Innovative Care – the deal is set to catapult the family onto Australia’s Rich List.
Innovative Care operates 10 aged care facilities across NSW, Victoria and Queensland with 1114 beds.
The terms of the deal which was announced this morning are confidential however the Australian Financial Review reported Innovative Care is worth $250 million while Bupa indicated it paid "in excess of $100 million".
Graeme Croft is the chief executive and chairman of Innovative Care and the closely knit family business also includes his wife, Sandi, who is a registered nurse and their children, Amal, who is a lawyer, and Ramsay, who is a builder.
Ramsay Croft leads the family’s property development arm, Croft Developments, which develops its aged care facilities.
Graeme Croft told SmartCompany that Innovative Care had talked to “a whole range of players”, which led to early stage discussions with Bupa.
“We’ve been talking [to Bupa] for a little while now and I think that they were really wanting to look at our systems and what makes us different to other aged care facilities.”
Croft says Innovative Care stood out from its competitors because it is “highly developed in IT”.
“We run a vertically integrated business. We have our own architects that we employ and our own building and construction team, we are our own builders.”
Croft says his family is “a pretty unique team” but they work “exceptionally” well together.
“We’re an unlisted public company now so we operate as a board and, whilst I am the chair, we have two independent directors. We prepare monthly reports and everybody needs to contribute to them,” he says.
The Croft family is following the path of entrepreneurs who have identified a generation of cashed-up seniors that need accommodation.
Croft says he spotted the opportunity in the aged care sector in the 1980s.
“I was completing a marketing degree at the time and I saw at the time there was a growth opportunity but the industry has been hamstrung by the licensing system and it has only been the government introducing more licences recently that has allowed it to flourish,” he says.
He started out in 1986 when he opened his first aged care business, a 15-bed nursing home.
“I acquired that then have been building and developing aged care facilities all my life,” he says.
Croft says the family will use the money from the sale to fast track further developments which are in the pipe line.
“We have got another five-odd facilities to develop in the future, so rather than stretch them over a couple of years they will be fast tracked now,” he says.
The facilities include a 166-bed facility in Tugun, Queensland, a facility set to start construction in January in Echuca, Victoria and in May in Traralgon, Victoria.
The acquisition of Innovative Care makes Bupa the largest aged care operator in Australia and finishes a busy week for the healthcare provider, which earlier in the week announced it had bought a 64% stake in Australia's largest provider of dental services, Dental Corporation, for $374 million.
The deal is subject to satisfaction of certain conditions, including regulatory approvals expected to be obtained no later than mid-February.
Bupa will make offers of employment to all of Innovative Care’s aged care home staff.
Dieter Lehmann, Bupa's director of corporate affairs in Australia and New Zealand told SmartCompany the Innovative Care homes were a great fit for Bupa.
"There are probably a few reasons, firstly it's a very good strategic fit as Innovative Care is a very strategic business as they are very high quality homes and in very good positions in high growth areas," he says.