Paragon passes from Duke St to HgCapital

Paragon Healthcare, an independent provider of specialist healthcare and rehabilitation services for patients with learning disabilities and severely challenging behaviours, has been sold by Duke Street Capital to HgCapital by way of a secondary buyout. Duke Street Capital has said the terms of the sale mean it can post a return of around 3.5 times its original investment and an IRR of 50%. HgCapital is paying £322m for the company.

Paragon Healthcare was known as Milbury Care when it joined Duke Street Capital’s portfolio in 2001 when the firm invested £63.4m in equity in the deal. The management team was changed, along with the company name, and four acquisitions were made in the following two years. To date Paragon Healthcare operates 1,600 beds, 650 of these have been in operation only since Duke Street Capital’s acquisition of the business.

Paragon’s management team of John Robinson, chairman, Nigel Harris, CEO, Douglas Quinn (MD) and Nigel Morton (FD, have reinvested in the business following it’s sale to HgCapital, as well as realising part of its existing investment in the business.

HgCapital is also an investor in Castlebeck Care, an independent provider of specialist healthcare and rehabilitation services for patients with learning disabilities and severely challenging behaviours, which it bought in 2002.