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Mears Group acquires Care UK’s domiciliary care service for £11.3m

Support services firm Mears Group has bought Care UK’s home care division, as was first reported by HealthInvestor, for a sum of £11.3 million.

The purchase price comprises of a base payment of £9 million with a further payment of £2.3 million made in respect of cash balances and excess working capital acquired on completion.

Care UK’s home care service looks after approximately 13,000 people across the UK and employs around 6,000 staff members.

For the year ended 30 September 2014, it reported revenues of £72.2 million and an operating loss before exceptional items of £2.6 million.

In a statement, Mears said Care UK had already started closing some branches of the domiciliary care business because of “particularly poor results in certain regions”.

The acquired assets will be renamed Mears Care and the management team will remain the same.

David Miles, chief executive of Mears Group (pictured), said: "I believe we have acquired one of our most significant competitors at an attractive valuation. Our focus will be upon enhancing service delivery thus enabling financial improvements.”

The acquisition  marks the completion of Care UK’s divestment strategy, which also saw it sell off its mental health and learning disability divisions. The private care provider has said it plans focus solely primary and secondary NHS health services and residential and nursing homes.

In May, Care UK sold its mental health assets, comprising of 322 beds, to Partnerships in Care for an undisclosed sum. It also sold its learning disability services group to Lifeways in the same month.

According to a press release, the three transactions, which had a combined annual ebitda of £12.9 million last year, have generated £130 million (before fees and expenses) for Care UK.

Mike Parish, chief executive of Care UK, said: “We are pleased to have reached very positive outcomes for patients and services users, colleagues and commissioners in all three services. The strategic review process which is now completed strengthens Care UK’s positioning for future growth within both the health and social care sectors.”

Rothschild advised Care UK on its divestments.


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Posted on: 01/06/2015

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