Blackstone plans healthcare IPO

UK care homes provider Southern Cross Healthcare has announced its intention to float on the London Stock Exchange in an IPO that could see Blackstone reduce its interest to below 50 percent.

Southern Cross Healthcare Group, the UK’s largest provider of care homes, has announced that it plans to raise up to £275 million (€399 million; $517 million) in a flotation that would value the business at approximately £550 million.
The Blackstone Group, the private equity owner of Southern Cross, will reduce its 88 percent stake in the business through the flotation. According to UK daily newspaper The Telegraph, Blackstone could reduce its holding in the company to less than 50 percent. Blackstone declined to comment for this story.
Morgan Stanley and UBS have been appointed joint financial advisers, sponsors, global co-ordinators, bookrunners and lead managers for the offer.
Blackstone acquired Southern Cross from West Private Equity in a £160 million transaction in September 2004, before merging the business with Nursing Home Properties, which the firm purchased in a £563.5 million take-private in November 2004.
In November 2005, Blackstone supported Southern Cross’ acquisition of the leasehold interests of the Ashbourne Group of care homes for an undisclosed sum.
Southern Cross is the UK’s largest provider of care home services for the elderly and a provider of specialist care services for people with physical and/or learning disabilities.

According to Southern Cross, the company has a six percent market share of total beds in a market estimated to be worth approximately £11.7 billion per annum. As at April 2 2006, Southern Cross had a total of 578 homes and 28,748 available beds.