Opinion

Last updated: 19th May 2010

This started with Lyceum Capital backed Carewatch acquiring three businesses in early April. Lyceum has added a total of 11 businesses to Carewatch, which they acquired in 2008 for £37m from Nestor.

This deal was follow by August Equity’s Enara acquisition of 6 domiciliary care businesses. August Equity has been one of the most prolific acquirers in this space, completing more than 15 bolt-on’s since 2009. August also acquired Active Assistance in March, a live-in care service for people with spinal and neurological conditions, which has been merged with their portfolio company, First Call Care Services.

The last private equity backed domiciliary care deal in April was Sovereign Capital backed City & County Healthcare’s acquisition of Sterling Homecare. This was Sovereign’s first bolt-on transaction and we are likely many more in the near future following their £25m commitment to expanding City & County.

These deals demonstrate the buy and build strategy of private equity firms and continued opportunities which exist for consolidation in this fragmented market.

These investments also show that confidence is returning to private equity investors, who are keen to deploy capital now. There have been a number of recent healthcare deals involving private equity, including ISIS’s investment in spinal implants distributor Surgi C and Synova Capital’s buyout of the Dental Buying Group. The healthcare services sector continues to punch well above its weight in M&A, and our view is that this will continue well into 2010 and beyond.

Justin Crowther
Director
Catalyst Corporate Finance