ADVANCED HEALTH LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2013/059246/06)
(“the Company” or “Advanced Health”)
ISIN Code: ZAE000189049        JSE Code: AVL


  DETAILED TERMS AND CAUTIONARY ANNOUNCEMENT REGARDING THE DISPOSAL OF AVL’S
       ENTIRE EQUITY INTEREST OF 56.44% WITHIN PRESMED AUSTRALIA PTY LIMITED


1 INTRODUCTION AND BACKGROUND TO THE TRANSACTION
  Shareholders are referred to the announcements released by Advanced Health on 15 June 2022,
  25 August 2022 and 10 November 2022, which advised that the strategic review of the Advanced
  Health group was ongoing. Advanced Health confirmed that it had received inbound approaches
  from several parties interested in a potential acquisition of its shares within PresMed Australia
  Pty Limited (“PMA”), the Australian subsidiary of Advanced Health.

  Shareholders are advised that PresMed BidCo Pty Limited has entered into a binding Share Sale
  Agreement (“SSA”) on 23 December 2022 (“Signature Date”) to purchase 100% of the shares
  within PMA from Advanced Health and other shareholders (the “Transaction”). PresMed BidCo
  Pty Limited is an entity owned by ICG Asia Pacific Fund IV (a USD 1.1 billion fund managed by
  London Stock Exchange listed Intermediate Capital Group plc (“ICG”)) and a consortium of
  management and medical shareholders (the “Consortium”). Pursuant to the Transaction,
  Advanced Health will dispose of 635,274 issued ordinary PMA shares (representing its entire
  equity interest, being 56.44% of PMA’s shares for a total transaction consideration (before
  transaction-related fees and charges) of approximately AUD45.2 million (approximately
  ZAR522.0 million).

2 BACKGROUND TO PMA
  PMA is a private day hospital group founded in 1997 and since 2014 majority owned by Advanced
  Health with the rest of the company owned by the long-standing Australian management team,
  directors, and a consortium of specialist doctors. PMA co-owns ten key operating assets, which
  include day hospitals, and consultation clinics in partnership with the practicing doctors in those
  facilities. The facilities are located in and around Sydney, the Central Coast (both within New
  South Wales) and Tasmania. PMA’s facilities specialise in a range of surgical disciplines being
  Ophthalmology, Ear Nose and Throat, Pain Management, Oral Maxillofacial surgery as well as
  other aligned surgery types.

3 BACKGROUND TO ICG
  ICG is a global alternative asset manager providing flexible capital solutions to help companies
  develop and grow. Headquartered in London, ICG is a leading global alternative asset manager
  with over 30 years’ history, managing USD68.5 billion of assets and investing across the capital
  structure. ICG was founded in 1989, is a FTSE250 listed company regulated by the Financial
  Conduct Authority and has offices in 15 countries across Europe, Asia and the US.

  ICG has had a permanent presence in Asia Pacific since 2001 and manages over USD1.5 billion in
  funds dedicated to the region. ICG is highly experienced in the healthcare sector globally and has
  made a number of successful healthcare investments in Australia & New Zealand, including
  current holdings in Canopy Healthcare and past investments in Cura Day Hospitals and Everlight
  Radiology. ICG has been a strategic investor across key businesses in various sectors, including,
  inter alia, RSEA Safety, SCF, Tegel, Perpetual Guardian, Ventura Bus Lines, Hoyts, Link Group and
  Veda Advantage. The Transaction will be funded from available capital resources within ICG’s
  fourth dedicated Asia Pacific fund (Fund IV), which has USD1.1 billion of committed capital.

4 RATIONALE FOR THE TRANSACTION
  The ability of the Advanced Health group to continue as a going concern is dependent on the
  directors continuing to procure funding for the South African operations, either through a sale of
  strategic investments or from other capital raising initiatives. The Transaction, which has the
  support of the Advanced Health board, provides the Advanced Health group with an attractive
  opportunity to realise its entire investment in PMA for cash, in order to procure the funding
  required to support the South African operations.

  The Transaction proceeds will initially be applied to restructure the Advanced Health group
  balance sheet by settling outstanding credit facilities and to finance the working capital
  requirements of the remaining South African operations.

5 KEY TERMS OF THE TRANSACTION
  5.1 Share Sale Agreement (“SSA”)
      With regard to Advanced Health’s equity interest in PMA, the Consortium will acquire and
      Advanced Health will sell its entire holding of 635,274 issued ordinary PMA shares
      (constituting 56.44% of the total 1,125,523 issued ordinary PMA shares), together with all
      the rights attached to the PMA shares as at the Effective Date (being 31 October 2022),
      including but not limited to, the right to receive all distributions declared, made or paid in
      respect of the PMA shares on or after the Effective Date.

       The SSA contains legal warranties and indemnities, which are considered reasonably
       standard for a transaction of this nature. AVL will receive payment in full on completion with
       a corresponding Warranty and Indemnity insurance policy being taken out, to protect all
       sellers including Advanced Health against historic liability subject to customary exceptions.

    5.2 PMA Equity Valuation and Transaction consideration
        The Transaction equates to a 100% PMA equity valuation of approximately AUD80.1 million
        and transaction consideration (before transaction-related fees and charges) for Advanced
        Health’s entire equity interest of AUD45.2 million (approximately ZAR522.0 million).

        The Consortium will fund the Transaction consideration from available cash resources as
        indicated in paragraph 3 above.

   5.3 Suspensive conditions
       Completion of the sale and purchase of Advanced Health’s shares pursuant to the
       Transaction is conditional on, and will not proceed unless and until, the following
       conditions are satisfied or waived in accordance with the executed SSA:

       5.3.1 Advanced Health shareholder approval
             The requisite majority of shareholders of Advanced Health approving all ordinary and
             special resolutions required to be passed in terms of section 115 of the Companies
             Act 71 of 2008 (“Companies Act”) and the JSE Limited (“JSE”) Listings Requirements
             to give effect to the Transaction.

       5.3.2 South African Regulatory approvals
             5.3.2.1 Within 30 business days of the Signature Date, the provision by the
                     Consortium of unconditional and irrevocable proof of funds (“Cash
                     Confirmation”) in compliance with Regulation 111(4) read with Regulation
                     111(5) of the Companies Regulations, 2011 (“Regulation”) to implement the
                     Transaction to the satisfaction of the Takeover Regulation Panel (“TRP”); and

              5.3.2.2 The securing of all approvals, to the extent legally required, from all
                      regulatory authorities, including the JSE, the TRP and the South African
                      Reserve Bank (“SARB”), (including the issuance of an unconditional
                      compliance certificate having been obtained from the TRP in terms of the
                      Companies Act, sections 119 and 121, as read with the Companies
                      Regulations including regulation 102(13) or if the compliance certificate is
                      issued subject to conditions, such conditions having been fulfilled).

       5.3.3 Consents
             Various landlord and counterparty consents customary for a transaction of this
             nature.

   5.4 Effective date
       The effective date of the Transaction is 31 October 2022 (“Effective Date”), notwithstanding
       the Signature Date.

6 PROFIT AND NET ASSET VALUES ATTRIBUTABLE TO PMA
  The net assets of the consolidated PMA group, as per the audited annual financial statements for
  the 12 months ended 30 June 2022, was ZAR372.3 million. The profit after tax attributable to the
  net assets of the consolidated PMA group for the same period was ZAR62.6 million.

  The audited annual financial statements for PMA were prepared in accordance with International
  Financial Reporting Standards (“IFRS”) as appropriate for for-profit-oriented entities.

7 CATEGORISATION OF THE TRANSACTION

  The Transaction is categorised as a Category 1 disposal for Advanced Health in terms of the
  Listings Requirements of the JSE and is therefore subject to Advanced Health shareholder
  approval.

  The Transaction further constitutes the disposal of the greater part of its assets and undertaking
  of the Company and is classified as an “affected transaction” as contemplated in terms of section
  112 of the Companies Act section 112 and is subject to the provisions of the TRP.

  In accordance with the TRP requirements Advanced Health will finalise the appointment of an
  independent board to oversee the Transaction and to procure and obtain the fairness opinion
  from BDO Corporate Finance as the Independent Expert, in accordance with regulations 90 and
  110 of Companies Regulations, issued in terms of section 223 of the Companies Act.

  Advanced Health will distribute the required circular to shareholders, including the notice to
  convene the general meeting, in due course, subject to the relevant regulatory approvals being
  obtained.

8 RESPONSIBILITY STATEMENT
  The board of directors of the Company accepts responsibility for the information contained in
  this announcement, and certify that, to the best of their respective knowledge and belief, the
  information is true and, where appropriate, this announcement does not omit anything likely to
  affect the importance of the information included.
9 CAUTIONARY ANNOUNCEMENT
  Shareholders are advised that, while this announcement complies with section 9.15 of the JSE
  Listings Requirements and contains all detailed terms required to be announced for a Category 1
  announcement, certain details required by the TRP for a Firm Intention Announcement, including
  the Cash Confirmation are being finalised and will be announced in due course. Accordingly,
  shareholders are advised to exercise caution when dealing in the Company’s shares until the Firm
  Intention Announcement is released on SENS.

  (Exchange rate applied in this announcement is AUD:ZAR = 11.5457 (Iress))

Johannesburg
23 December 2022

Corporate Advisor and Independent Designated Advisor to Advanced Health
Grindrod Bank Limited

Transaction and Financial Advisor to Advanced Health
Monash Advisory Pty Ltd

Australian Legal Advisor to Advanced Health
Gilbert + Tobin