London-listed Primary Health Properties (PHP), which has a property portfolio in the Republic worth about €100 million, has agreed an all-share merger with another primary care specialist.
PHP’s merger with MedicX will create a company with almost 480 properties worth a combined £2.3 billion (€2.6bn). Annual rental income for the combined portfolio will exceed £120 million.
Shares in the FTSE 250-listed PHP had fallen 2.43 per cent by mid-morning, while MedicX rose 11.86 per cent.
PHP holds eight facilities in the Republic spread across Dublin, Wicklow, Kildare, Laois, Cork and Tipperary. The company is ultimately targeting between €150-€160 million of primary care assets in the Republic, its managing director, Harry Hyman, has said.
The merger will see MedicX shareholders receive 0.77 new PHP shares for each share they hold, meaning PHP shareholders will own 69 per cent of the combined group. The deal values MedicX shares at a 14 per cent premium to their closing price on Wednesday.
Increasing demand
The boards of the two companies said the enlarged group would be more able to meet increasing demand for high-quality primary health facilities across the UK and the Republic.
The enlarged group is expected to achieve cost savings of about £4 million per year.
"The merger represents a major step forward in PHP's strategy which significantly extends the scale of our business and asset value," said the company's chairman Steven Owen.
"The highly complementary nature of the two portfolios will allow the combined business to continue to maximise shareholder value through delivering synergies across the businesses, and accelerate the enlarged group's role in the modernisation of the primary care estate in the UK and Ireland. "
