February 2, 2018 / 5:33 PM / in 18 days

Bridgepoint to sell British care homes operator Care UK - sources

LONDON, Feb 2 (Reuters) - British buyout firm Bridgepoint has mandated Rothschild to sell the residential care business of Care UK, four financial sources familiar with the matter said.

Private equity backers have been ubiquitous in Britain’s care homes sector. Another British private equity firm Terra Firma had to write down its investment in Four Seasons, one of the country’s biggest care home operators.

But Care UK’s care homes had a much higher proportion of beds paid for privately by residents and was therefore less reliant on government spending, sources said.

“Care UK has a very good portfolio of assets and its new care homes are pretty good,” one of the sources said, adding that private equity and infrastructure funds had shown interest.

Bridgepoint and Rothschild declined to comment.

The private equity backer of fast food chain Pret A Manger delisted and acquired Care UK in 2010 in a 414 million pound ($584 million) deal, financed by a 250 million pound high yield bond.

A healthcare division of the group is not part of the sale, sources said. Bridgepoint had sold parts of the business since, and several sources said it was too soon to estimate a valuation.

In the year ending September 2017, the residential care division accounted for 32.9 million pounds of earnings before interest, tax, depreciation and amortization (EBITDA) and 300.7 million pounds of annual revenue.

Care UK’s entire EBITDA was 38.7 million pounds on a revenue of 658 million pounds, according to its website.

Care UK operates 118 care homes with close to 8,000 beds.

On its website, Bridgepoint says Care UK enjoys long-term opportunities in residential and social care underpinned by favourable trends in healthcare outsourcing and the demands placed on health systems by an ageing population and higher expectations from the public.

Care UK could be at risk of a higher wage bill, if Britain’s plan to leave the European Union results in fewer European healthcare workers competing for jobs.

$1 = 0.7084 pounds Editing by Edmund Blair

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