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HCP to back Formation Capital’s acquisition of HC-One

The US real estate investment trust HCP is to back Formation Capital’s planned acquisition of the care home group HC-One, HealthInvestor understands.
HCP will provide mezzanine finance for the deal, which will cost Formation Capital around £550 million, according to the Sunday Times.
HC-One, which was formed from the ashes of the Southern Cross care home group in 2011, owns 241 care homes nationally. Its owner, the property firm NHP, announced it would pursue a sale last summer.
Formation is now said to be weeks away from snapping up the group. As part of the deal, the US fund is also expected to pick up the freeholds on a further 56 care homes owned by NHP but run by other operators.
Both Formation Capital and HCP declined to comment.
HCP’s involvement in the deal may surprise some, however it’s been scoping investment opportunities in the UK for a while. Last May it bought £175 million of Barchester care group’s junior debt; it was also rumoured to be in the running to buy the firm before its sale to Ravenshill International.
The successful sale of HC-One could bag its management team in excess of £30 million. The team, which is led by Dr Chai Patel, were promised between 2% and 6% of the company’s eventual sale value when they were hired.

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Posted on: 26/03/2014

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