Tunstall, a European provider of telecare systems, was acquired by Bridgepoint in a secondary buyout from HgCapital totalling £225m. There was strong interest through the three-month sales process, but management was keen on Bridgepoint’s bid from the outset because the firm already owns Nordic-based Attendo, Tunstall’s main competitor.
Bridgepoint will combine Tunstall with the telecare division of Attendo Group, the Nordic operator of elderly and care homes services that it acquired in February for €245m. The combined group will have budgeted sales of over £100m.
“The compelling economics of telecare solutions are reflected in the growth in sales across Europe,” said James Buckley, UK managing director of Tunstall. “This is a cost-effective solution for local authorities as it reduces the need for residential care, whilst at the same time allows individuals to preserve their independence.”
HgCapital completed the £102m management buyout of Tunstall in 1999. Under its ownership, Tunstall expanded its activities in the major European markets, as well as North America and Australasia. This focus on new markets, together with improved manufacturing processes, has resulted in a doubling of profits since acquisition, from £9m to £18m. Annual year-on-year growth was 15%, while turnover increased 56% to £78m.
HgCapital recapitalised the company in 2004, returning £26m to clients. After the sale, the firm’s £51m investment will have returned a total of £136m, representing 2.8 times original cost and an IRR of 22%. A further £3.3m is dependent on current year performance.
“Tunstall is poised to benefit further from the clear recognition that telecare is the most cost-effective solution to the reassurance needs of the elderly,” said Lindsay Dibden, head of Hg’s healthcare team.