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Abano Announces Revised Scheme of Arrangement

Ontario Teachers’ part of Bidco in agreement to acquire New Zealand-based dental care provider

  • Abano has entered into a new Scheme Implementation Agreement (SIA) with Adams NZ Bidco Limited (Bidco).
  • The revised Scheme price is at $4.45 per Abano share and the SIA removes the right (contained in the previous SIA) for Bidco to terminate the Scheme if a ‘material adverse change’ occurs. Instead, the Scheme price is subject to specified price reductions, up to a maximum of 75 cents per share, if any one of a number of defined Adjustment Events occur.
  • The Scheme price represent a 70% premium to Abano’s share price of $2.61 per share at the close of trading on Friday, 28 August 2020 (being the last trading day prior to announcement of the SIA).
  • Abano’s Directors unanimously recommend shareholders vote in favour of the Scheme, in the absence of a superior proposal and provided that the Scheme price is within the Independent Advisor’s valuation range for Abano shares.  Each Abano Director who holds or controls Abano shares intends to vote all of such shares in favour of the Scheme, subject to the same qualifications.

Abano Healthcare Group Limited (NZX: ABA) has today announced a new Scheme Implementation Agreement with Bidco, the party involved in the original Scheme which was terminated in March 2020 due to the advent of a ‘material adverse change’, resulting from the impact of COVID-19 on Abano’s business.

Under the revised SIA, Bidco has agreed to acquire 100% of the fully paid shares in Abano for $4.45  in cash per share, subject to specified price reductions of up to a maximum of 75 cents per share if any one of a number of defined Adjustment Events occur. The revised SIA removes the right of Bidco to terminate the Scheme if a ‘material adverse change’ occurs, thereby reducing the uncertainty that the Scheme will complete.

The Board has concluded that, on balance, the Scheme price of $4.45 per share  provides shareholders with the ability to realise value for their shares and mitigates the risks of executing the company’s strategy in such uncertain times.

The Board unanimously recommends the transaction to shareholders, in the absence of a superior proposal and provided that the Scheme price is within the Independent Adviser’s valuation range for Abano shares.

With the information to be provided in the Scheme Booklet, shareholders will be able to form a view as to whether they are willing to accept the assessed value impacts of the Adjustment Events, should they occur, on the price they will receive for their shares.  After carefully considering the adjustment regime, the Board believes that it is appropriate (including taking into account the increased certainty that it provides to shareholders that the Scheme will be completed and the risks that Bidco assumes under that regime).

Shareholders will also need to consider that, should the Scheme not proceed:

  • shareholders will retain the risk of the actual value impacts should any of these events occur; and
  • the company will likely undertake a capital raising to reduce its debt facilities and provide greater resilience to further impacts from COVID-19.

Following termination of the previous Scheme, the Abano Board evaluated options to address the company’s capital structure (which it has publicly stated it is committed to addressing during the course of the current calendar year) and to enhance value for shareholders.  As part of this, and prior to entering into the SIA, the Board received and rejected a number of earlier Scheme proposals from Bidco at prices the Board was not prepared to recommend to shareholders. 

Chair of Abano, Pip Dunphy, says: “The dental industry is highly sensitive to the COVID-19 environment, with only limited emergency care able to be provided during level 3 and 4 lockdowns, and the pandemic has had a material impact on Abano’s business and cashflows this year. While Abano is expected to recover to pre-COVID trading levels, the timing of this remains uncertain and the risks of further impacts from COVID-19 can be expected in the near term.”

“The new Scheme proposal removes the uncertainty of a ’material adverse change’ impacting on the settlement of the Scheme, and instead, a series of pricing adjustments have been negotiated which contemplate a number of potential adverse events that could occur between today and settlement of the Scheme and quantifies those impacts on the company’s value. The change in price offered by Bidco from $5.70 in the original Scheme to $4.45 reflects COVID-19 and other impacts on the business in both Abano’s financial years ended 31 May 2020 and the current financial year, as well the risk of further impacts.”

“The Board believes that the Scheme allows shareholders to realise value for their shares today, mitigates the risks of executing the company’s strategy in such uncertain time, and unanimously recommends the transaction to shareholders.”

The Scheme is subject to the approval of Abano shareholders, the New Zealand High Court and other customary conditions as referred to in the appendix to this announcement. Abano shareholder approval will be sought at a special meeting of shareholders likely to be held in November 2020.

Calibre Partners (previously KordaMentha) has been appointed to prepare an Independent Advisor’s Report to assist shareholders to assess the merits of the Scheme.  This will form part of the Scheme Booklet that will be sent to shareholders along with details of the special meeting. 

Shareholders are encouraged to carefully consider the materials that will be sent to them and to exercise their right to vote at the special meeting.  If shareholders have questions, they are encouraged to seek their own professional advice.

Value of the Offer
The all-cash price of $4.45 per Abano share represents:

  • An equity value for Abano of $117m and an estimated enterprise value of $256m.
  • A premium of 70% to Abano’s closing price on the NZX of $2.61 per share on Friday, 28 August 2020 being the last trading day prior to Abano announcing the revised Scheme. 
  • A premium of 70% to Abano’s volume weighted average share price (VWAP) over the 30-day period prior to Friday, 28 August 2020.
  • An implied EV/EBITDA multiple of 14.8x (based on Abano’s FY20 underlying EBITDA of $17.4m pre-NZ IFRS 16).

Adjustment Events
While there is no ability for Bidco to terminate the Scheme if a ‘material adverse change’ occurs, if any one or more of the following Adjustment Events occurs, then the Scheme Price will be reduced by the amount specified in the table below.  Bidco has agreed to a maximum (capped) price adjustment of 75 cents per share.

An Adjustment Event could occur at any time prior to the morning of the implementation date.  This means that the Scheme price could be reduced after shareholders have voted on the Scheme if an Adjustment Event occurs after the date of the shareholder meeting. The various Adjustment Events are summarised in the appendix.

Description of Adjustment Event (defined in the SIA and set out in the Appendix to this announcement)

Amount of price reduction (per share)

NZ Pandemic Adjustment Event

>30 cents

Queensland Pandemic Adjustment Event

20 cents

NSW Pandemic Adjustment Event

15 cents

One-Off EBITDA MAC Adjustment Event or an Asset MAC Adjustment Event

30 cents

Recurring EBTIDA MAC Adjustment

55 cents

Regulatory Adjustment Event

15 cents

The maximum amount by which the Scheme Price may be reduced is capped at 75 cents per Abano Share (delivers a minimum Scheme Price of $3.70 per Abano Share).

Termination rights
In addition to the conditions referred to above, there are a limited number of termination rights which, if triggered, could result in the Scheme not proceeding.

Released on behalf of Abano Healthcare Group Limited by Jackie Ellis tel +64 9 360 8500 or email

For more information, visit or please call:

Richard Keys
Chief Executive Officer
Tel: +64 9 300 1413  Mob: +64 274 818368

Pip Dunphy
Tel: +64 21 249 8621

Abano Healthcare Group is listed on the NZX and owns and operates one of the largest dental networks in Australasia, comprising Lumino The Dentists in New Zealand and Maven Dental Group in Australia.

About BGH Capital
BGH Capital was established in 2017 by Robin Bishop, Ben Gray and Simon Harle with the objective of creating the pre-eminent private equity firm in Australia and New Zealand. BGH Capital is headquartered in Melbourne, Australia and is an independent firm, owned and managed by its founding partners. BGH Capital Fund I had a final close of approximately A$2.6 billion in May 2018. This represents the largest private equity fund focused on Australia and New Zealand that is actively deploying capital. BGH Capital aims to provide its portfolio companies with the capital they need to grow, as well as analytical, strategic and operational resources to help them realise their full potential. For more information, visit

About Ontario Teachers’ Pension Plan Board
The Ontario Teachers' Pension Plan Board (“Ontario Teachers”) is the administrator of Canada's largest single-profession pension plan, with $204.7 billion in net assets (all figures at June 30, 2020 unless noted). It holds a diverse global portfolio of assets, approximately 80% of which is managed in-house, and has earned an annual total-fund net return of 9.5% since the plan's founding in 1990. Ontario Teachers' is an independent organization headquartered in Toronto. Its Asia-Pacific region office is located in Hong Kong and its Europe, Middle East & Africa region office is in London. The defined-benefit plan, which is fully funded as at January 1, 2020, invests and administers the pensions of the province of Ontario's 329,000 active and retired teachers. Ontario Teachers’ Pension Plan has been a major shareholder in Heartland Dental, one of the largest dental organisations in the United States, for many years.

1 Bidco is an entity that will be owned by BGH Capital (BGH Capital) and Ontario Teachers’ Pension Plan Board (OTPP).