London-headquartered mid-market firm
Healthcare Homes is a Colchester, Essex based elderly residential care provider. It owns and runs 21 care homes with more than 800 residential beds and 200 day-care spaces, making it the largest company of its kind in East Anglia. It also provides care services to younger adults with physical disabilities.
The deal is the latest in a line of private equity investments in the healthcare sector this year. Research conducted by Mergermarket’s research arm, Remark, on behalf of August Equity picked out healthcare as the industry most likely to do well in the current market uncertainty – 17% of respondents to be regarded it as a “hot” area in the current economic environment, closely followed by energy, mining and utilities.
Recent dealflow backs this up. In March Tunstall Group was sold by Bridgepoint to Charterhouse Capital Partners for £514m, and in February, Merrill Lynch Global Private Equity acquired Integrated Dental Holdings for £250m, Cinven bought Classic Hospitals, and Bank of Scotland Integrated Finance backed the MBO of Verna Group, a Bolton-based healthcare business.
August Equity, which has a track record of healthcare investment, backed a £37m MBO of HHG in August 2005 when it owned just four homes with 100 beds, and followed a buy and build strategy to power its expansion. In total HHG has made eight acquisitions since August took over, the last one coming in February with the purchase of Manorcourt Care Limited, a privately owned care and nursing home group based in Norfolk, providing the group with an additional 87 registered care beds.
The sale to Bowmark reunites HHG’s chief executive Richard Clough with Bowmark, having worked together on three previous deals: The Regard Partnership, the learning disability care provider; Medscreen, the drug and alcohol testing services group; and Care UK, the health and social care provider.
Clough said: “With Bowmark’s financial support and considerable experience in the residential healthcare sector, we will pursue our strategy of growing the business through targeted acquisitions and the extension and expansion of our existing homes.”