Private equity firm Terra Firma has followed up on its recent acquisition of The Garden Centre Group by acquiring care homes provider Four Seasons Health Care.
Terra Firma is paying £825 million for Four Seasons, through a mixture of equity and new debt, with Goldman Sachs and Barclays providing the debt element of the deal.
Cheshire-headquartered Four Seasons has 445 care homes and 61 specialist care centres. It owns 60 per cent of its facilities outright.
Guy Hands, chairman and chief investment officer at Terra Firma, comments, ‘By investing new equity, Four Seasons’ debt has been very substantially reduced and Terra Firma has brought stability to the company.
‘Four Seasons, with a stable capital structure and clear ownership, will be able to lead the sector in terms of quality of service.’
Four Seasons has undergone a rapid expansion since 1997, after which it was sold for £775 million in 2004. It was then purchased by Three Delta, an investment fund backed by the state of Qatar, in 2006 through a deal largely supported by debt.
Geoff Westmore, chairman of Four Seasons, says that the transaction is a great result for all stakeholders.
He adds, ‘Our current lenders will be repaid in full and going forward the company will have a substantially lower amount of debt and a stable and secure financial structure.
‘I have been impressed with Terra Firma’s enthusiasm for the business and their commitment to the company’s future and to maintain our high standards of quality.’
In March Terra Firma bought The Garden Centre Group for £276 million, six years after the company was acquired by entrepreneur Tom Hunter for £445 million.