Private equity firm Terra Firma has acquired Four Seasons Health Care for a total consideration of up to £825 million.
The deal, which is being financed through a mixture of equity and new debt, is expected to complete on or before 16 July 2012, at which point Four Seasons’ existing debt liabilities will be discharged in full.
Royal Bank of Scotland, which took on a 40% stake in Four Seasons during a debt-for-equity swap in 2009, has remained as a minority equity investor. It is understood that Terra Firma intends to retain Four Seasons’ existing management team, including chief executive Pete Calveley.
Four Seasons has been engaged in talks with a range of potential buyers over recent months as part of efforts to refinance its historic £780 million debt. The deal means the firm’s debt will be cut by about a third, to £550 million.
Guy Hands, chairman and chief investment officer of Terra Firma, said: “By investing new equity, Four Seasons’ debt has been very substantially reduced and Terra Firma has brought stability to the company.
“Terra Firma is committed to further investment in the business in order to achieve long-term sustainable growth. Our number one priority is to ensure that Four Seasons delivers consistent high-quality care and peace of mind for residents, service users and their families. Four Seasons, with a stable capital structure and clear ownership, will be able to lead the sector in terms of quality of service.”
Geoff Westmore (pictured
), chairman of Four Seasons, commented: "This transaction is a great result for all our stakeholders, including our residents and their families, care commissioners and our dedicated caring staff as well as our lenders and shareholders.
“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. This will enable Four Seasons to continue doing what it does so well, which is provide first class care to our residents and reassurance to their families.”
Four Seasons is the UK’s largest care home operator, with 445 care homes with 22,364 beds, and 61 specialist care centres with 1,601 beds. It owns around 60% of the facilities it operates, and last year took on operations at 138 Southern Cross homes.
Four Seasons was advised by Rothschild, Gleacher Shacklock and Deutsche Bank. Four Seasons’ legal advisers were Macfarlanes. Terra Firma was advised by Barclays and Goldman Sachs. Terra Firma’s legal advisers were Slaughter and May.