Tuesday 29th April 2008
CareTech starts acquisition campaign
A provider of care services to people with learning disabilities has added 16 freehold properties to its portfolio after buying a rival company.
CareTech has acquired Beacon Care in a deal that adds more than 100 places to its residential operations in southern England, as well as strengthening its in-house expertise.
Beacon provides residential care and supported living services for adults with learning difficulties, and will be integrated into CareTech’s southern operations.
CareTech paid £18.6 million on completion, but the full value of the transaction could rise to as much as £22.5 million. Up to £3.9 million in cash is due if the acquired company meets agreed performance targets.
Of the initial sum, £15.6 million was in cash with the balance satisfied through the issue of 600,000 ordinary shares at 500p each. The cash element was funded through debt provided by Royal Bank of Scotland and Allied Irish Bank.
This deal is part of CareTech’s expansion plans as its directors believe the market is ripe for consolidation due to the current economic turmoil, increasing regulation and a growing demand for quality care, which favours larger operators.
CareTech executive chairman Farouq Sheikh confirmed that this will not be the group’s last deal. “The board will continue to evaluate further selective acquisition opportunities that will deliver outstanding results for our clients and enhance shareholder value.”
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