CareTech gobbling up Selborne Care for £17m
(ShareCast News) - Specialist social care services provider CareTech Holdings announced on Monday that it had agreed to acquire the entire issued share capital of Selborne Care for a total consideration of £16.9m in cash.
The AIM-traded firm described Selborne as a "high quality provider" of specialist residential care, supported living and day care services for adults with learning disabilities and challenging behaviours.
Selborne is based in Droitwich in Worcestershire, and operates across the Midlands and the South West.
It has 57 residential beds in eight freehold sites, with supported living services provided to 30 service users, and "innovative" outreach and day services also offered.
Selborne was founded in 2006 by its directors John McAllister, Michael Stratford, Simon Bishop and Peter Mooney, who all had "extensive" healthcare experience, though would not remain with the business post-completion, the CareTech board said.
The company had delivered year-on-year growth since it was founded.
In the year to 31 December, Selborne reported revenues of £13.3m and EBITDA of £2.4m.
Its net assets on a debt-free, cash-free basis at 31 August 2016 were £13.4m, and the acquisition included freehold properties carried in Selborne's balance sheet valued at £12.4m.
The acquisition, which was expected to be immediately earnings enhancing, was in line with CareTech's strategy of geographic expansion according to the board, and reportedly strengthened its presence and service offering in the Midlands and South West.
It would be financed from existing cash resources.
"We have enjoyed developing Selborne since its creation in 2006 and would like to thank our staff for their support and dedication over this time whose contribution has helped Selborne become the quality operation it is today," said Selborne chief executive Mike Stratford.
"We are delighted to be handing over to CareTech who we believe share our commitment to customer focused, quality care and support services.'"
Farouq Sheikh, CareTech's executive chairman, said the firm was "delighted" to announce the acquisition of Selborne.
"The acquisition is immediately earnings enhancing.
"In line with our growth strategy, it extends our geographical reach and service offering to local authorities," Sheikh explained.
"We continue to evaluate other acquisition opportunities to further consolidate our fragmented marketplace."