CareTech in #35 million secondary MBO

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Investee company

CareTech Community Services

Investee company business type

Provides residential care and support for people with learning disabilities

Type of financing

Secondary MBO

Equity providers

Barclays Private Equity

Equity leader (individual)

Andrew Murtagh

Debt provider

Royal Bank of Scotland

Debt type

Senior

Debt leader (individual)

N/K

Equity amount

Undisclosed

Total deal value

£35 million

Other advisors

PricewaterhouseCoopers, Deloitte & Touche

Comments – Barclays Private Equity led the secondary management buyout (MBO) of CareTech Community Services, with a total funding in excess of £35 million. Royal Bank of Scotland provided debt for the transaction, which gives Barclays a 40 per cent stake in CareTech. The buyout provides an exit opportunity for the 3i Group and several other existing shareholders.

CareTech is based in Potters Bar, England. The company was founded in 1993 to provide client services focussing specifically on people with learning disabilities. Since its inception the company has expanded rapidly through a mixture of organic growth and acquisitions. CareTech currently operate 52 care services for 238 residential users and 45 day clients. The company operates small residential care homes, creating comfortable and homely environments that follow the principles of an “ordinary life”.

As part of the transaction, a proportion of the £35 million deal value is to be used by CareTech for further expansion of the business. The company will focus on three main areas: developing its existing portfolio; extending services and properties and through acquisition.

Andrew Murtagh, investment director at Barclays Private Equity, commented: “CareTech offers a quality of service rare in its industry. We are backing a proven incumbent team with a strong track record and have put in place significant additional funding to support their growth ambitions.

Farouq Sheikh, group chief executive of CareTech, said: “In under ten years we have developed a range of leading edge care services from structured day care to specialised residential services including unique provision for people with early onset dementia and outstanding support for people with autism. With demand constantly outstripping supply, this investment by Barclays Private Equity will allow us to continue our first class care to an increasing number of people.