3i backs Westminster MBO

3i has invested £70m in the £267m management buyout of UK care home operator Westminster Health Care.

3i has completed the acquisition of Westminster Health Care beating off competition from other UK private equity firms as well as UK private healthcare provider Bupa. Both Electra Partners Europe and Legal & General Ventures were reported to be keen to buy the business.

3i is to invest approximately £70m in the £267m buyout of the Surrey-based firm, and will also assume servicing of the £195m bond already issued by Westminster. The company provides a wide range of health care services including senior living, rehabilitation services, specialist units, intermediate care services and respite care.

Whitehall, the consortium of Goldman Sachs and Welsh, Carson, Anderson & Stowe which controls Westminster, will complete its exit from the health care firm with the imminent sale of the Priory Clinic group to Doughty Hanson for a fee of around £290m.

3i’s says its investment will allow the company to invest in new assets and services at an important time for the heath care sector.  With the growing regulatory demands on care homes and the number of UK citizen’s aged over 85 forecast to rise by 15 per cent between 2005 – 2007, 3i are banking on Westminster growing its share of an increasingly important sector.

Tony Heywood, chief executive, will lead the management team and 3i has appointed Nick Irens chairman. Westminster was advised by NM Rothschild, while 3i was advised by Deloitte & Touche Corporate Finance.