CareTech expands to acquire ROC North West

The AIM-listed specialist social care services provider announced the deal on Tuesday.

It said it will pay an initial cash payment of £8.725m, funded from existing resources and net proceeds from the group's share placement in March 2015.

An earn-out sum of up to £2.7m will also be payable through the issue of shares, with the remainder of that amount determined by ROC's EBITDA performance to July 2016.

ROC co-founder Hilary Waterhouse said she is pleased that her company have joined the larger family of CareTech.

“We had a number of different companies wishing to buy our business but chose CareTech as we believe in their philosophy of care and working practices that mirror our own expectations and high standards."

CareTech executive chairman Farouq Sheikh said ROC has seen some impressive growth in the past few years.

“[It] reflects the quality and innovation of its services and the strength of its local authority relationships,” he said.

"This acquisition, which is expected to be immediately earnings enhancing, marks our third transaction utilising the whole of the £21 million gross placing in March this year within 9 months."

ROC North West provides residential care and education services for young people with complex needs.

It has a capacity of 41 residential places in seven residential homes in Lancashire and 25 education places in its school in Preston.