GLOBAL – The Canada Pension Plan Investment Board (CPPIB) has acquired a 15% stake in ORPEA, a European provider of long-term care through nursing homes, post-acute care and psychiatric clinics on more than 400 sites.
The shares, worth €320.8m, were bought from ORPEA’s founder and chairman Jean-Claude Marian.
Marian retains an 8% share in the company, which is listed on Euronext Paris, and also remains as chairman.
He has agreed not to sell his remaining shares in the company for a further 18 months.
CPPIB, whose European investments totalled CAD19.4bn (€13.3bn) as at 30 September, said it intends to be a long-term reference shareholder for ORPEA, and to work alongside the group through the next phase of its development, particularly as it expands internationally.
In particular, ORPEA is accelerating its expansion into China, recently signing a strategic partnership with China Development Orient (CDO), an entity that is ultimately owned by the Chinese government.
ORPEA believes the agreement will make it easier to develop its dependency care facilities throughout the country.
CDO will propose properties and contribute to financing, while ORPEA will operate the facilities and train employees.
CPPIB is also, alongside other institutional investors, underwriting a capital increase of €100m, which could later be extended by a further €20m, amounting in total to 5.6% of the company’s share capital at current prices.
A 10-year investment agreement provides that CPPIB has one representative on ORPEA’s board of directors as long as it holds at least 8% of the voting rights, and two representatives for 16% of the voting rights.
CPPIB will be bound by an 18-month lock-up.
After this period expires, it may seek the company’s co-operation in carrying out trade sales or private placements of significant amounts.
Scott Lawrence, vice-president and head of relationship investments at CPPIB, said: “ORPEA has a demonstrated a track record of exceptional client service balanced with strong operational and financial performance.
“The alignment of ORPEA’s strategy with CPPIB’s long-term investment objectives will help foster future success.”