3i to sell Care Principles

Rothschild has been appointed by 3i to sell specialist care provider Care Principles. An auction is expected to start in about two weeks.

An auction is likely to include attract interest from the likes of HgCapital and Blackstone.

3i led the £90m (€133m) management buyout of Care Principles in April 2005. Immediately following the buyout, Care Principles acquired Ermine Care, which operates four long stay complex community care units. The combined deal value was £110m (€162m).

However 3i has actually been an investor in Care Principles since 1997, when a team of managers out of General Healthcare approached them to build and run medium secure hospitals. At that time 3i invested £1.5m for a 38% stake in the business. Two years ago the private equity house then bought the founders’ stakes increasing their majority to 85%.

Paul Preston, former MD of General Healthcare Group’s BMI Hospitals was appointed CEO of the group, the group, and Nick Irens, former Chairman of Westminster Healthcare was given the post of Chairman.

Care Principles is a niche business now operating 400 secure beds in five regions across England. The homes provide intensive care for patients requiring long term therapy and treatment for adults with severe learning disabilities and mental health problems. All patients are sectioned under the Mental Health Act and receive rehabilitation through a combination of nurses and carers with a typical staff to patient ratio of four to one. The average length of stay for an individual is approximately four years.

The organisation employs around 1,500 staff and operates across a range of therapeutic environments including secure hospitals, step-down units and community-based specialist care homes.

Sandrine Bradley