Bupa announces plan to acquire Dental Corporation

Bupa Australia Health Pty Ltd (Bupa Australia) today announced its plan to acquire Dental Corporation (Dental Corp), through a Scheme of Arrangement (Scheme) under the Corporations Act.

Dental Corp is Australia and New Zealand's largest dental group, comprising 190 clinics and over 560 dentists.

Bupa Australia will acquire 100% of the shares in Dental Corporation on completion. Fortis and financial investors will be entitled to receive $2.347 per share and management and dentists will be entitled to receive $0.9388 per share (representing 40% of $2.347) plus three annual earn out payments over the next three years. Each of these three earn out payments will be primarily determined by reference to the adjusted EBITDA and enterprise value of Dental Corp in each of the 2014, 2015 and 2016 financial years.

In addition to the Scheme, Bupa and Dental Corp also propose to cancel all outstanding Dental Corp options by way of a option scheme of arrangement (Option Scheme) in consideration for a cash payment.

Dental Corp's board has unanimously recommended that Dental Corp shareholders vote in favour of the Scheme, in the absence of a Superior Proposal and subject to the independent expert concluding that the Scheme is in the best interest of Dental Corp shareholders. Subject to those same qualifications, each Dental Corp director intends to vote all Dental Corp securities held or controlled by them in favour of the Scheme and the Option Scheme. Dental Corp's majority shareholder, Fortis Healthcare Australia Pty Ltd (Fortis), also intends to support the proposal.

Bupa Australia and Dental Corp have entered into a scheme implementation deed. A copy of the scheme implementation deed is available on Dental Corp's website at www.dentalcorp.com.au. The scheme implementation deed contains a mutual reimbursement fee regime and also contains certain exclusivity arrangements in Bupa Australia's favour, as well as provisions relating to board appointments, termination rights and the full terms of the conditions of the Scheme.

Bupa Australia and New Zealand Managing Director, Dean Holden, said the acquisition would strengthen Bupa's existing healthcare offering which already included private health insurance, aged care, health coaching, optical outlets and corporate health services.

"Bupa is excited by this acquisition and we look forward to working in partnership with Dental Corporation's senior management team and dentists to continue to build on their track record of growth and success," Mr Holden said.

"This deal supports Bupa's purpose of our customers living longer, healthier, happier lives. It also assists in Bupa's aim globally to be a healthcare partner to many more people around the world," he said.

Dental Corp Executive Chairman Mark Evans said: "We believe that the relationship with Bupa will allow us to continue to expand our service offering into the future and we see many opportunities for growth. Our companies share a common vision of delivering outstanding healthcare and we see Bupa as the logical partner to support us in this endeavour. We would also like to thank our shareholders, and especially Fortis, for supporting us to deliver our vision of creating one of the leading dental services providers in the world."

Fortis Healthcare Executive Chairman Malvinder Singh said: "We acquired our initial shareholding in Dental Corp in January 2011 and have since seen considerable growth in the business by increasing from 140 to 190 dental practices in Australia and New Zealand and entering the Canadian market. We see Dental Corp's future opportunities as being outside Fortis' focus geographies and this move is in line with Fortis' strategic decision to focus on healthcare in Asia including India. We wish the company well and Fortis intends to vote in favour of the Scheme in the absence of a Superior Proposal." Dental Corp has engaged Moore Stephens to prepare an independent expert's report expressing an opinion on whether the Scheme and the Option Scheme are in the best interests of the Dental Corp security holders.

An Explanatory Booklet containing full details of the Scheme and the Option Scheme, the reasons for the Dental Corp Directors' unanimous recommendation, a copy of the independent expert's report and the notices convening the Scheme Meetings and the Option Scheme Meeting is expected to be sent to Dental Corp security holders in March 2013.

The Scheme Meetings and the Option Scheme Meeting are expected to be held in late March 2013. Subject to the approval of the Scheme and the Option Scheme by security holders and the court and the timely satisfaction (or waiver) of the remaining conditions, Dental Corp expects the Scheme and the Option Scheme to be completed around late March 2013.