Sovereign Capital has announced details of an £8.7m investment in a management buyout at Community Homes of Intensive Care and Education (CHOICE). The investment is the first to come from the Sovereign Capital Limited Partnership III (SCLP III) fund which is expected to close imminently, having received commitments in excess of £100m, the fund’s original target.
The transaction includes initial funds to support the management buyout and additional development capital to fund organic growth and acquisitions. Sovereign Capital has invested and committed a total of £8.7m and Lloyds TSB Acquisition Finance has provided the debt funding. Olswang provided legal advice for Sovereign, whilst Lloyds TSB Acquisition Finance was advised by Birmingham-based Martin O’Johnston.
The management buyout team is headed by Paul Gold who has been managing director since 1993. The team has recently been strengthened by the appointment of Edwina Johnston, finance director, previously group finance director of H Young Holdings plc.
Andrew Hayden, director at Sovereign Capital said the investment in CHOICE was part of the Sovereign’s ongoing commitment to the healthcare sector. “We have considerable experience in the healthcare sector, and this investment continues our trend of investing in strong performing companies with experienced management teams. We will be looking for suitable buy-and-build opportunities with the acquisition of community homes as well as smaller related companies.”
Sovereign’s previous investments in the healthcare sector include Care UK plc, Speciality Care, Craegmoor Healthcare, CVS and Ambic.
Founded in 1988, Sovereign Capital is an independent UK private equity fund manager focused on investing in mid-market UK companies requiring £2-15m of equity. Recent transactions include an £8m investment in January in Promanex Group Limited. Sovereign Capital led and structured the original MBO of Promanex Group in December 1999.
In February Sovereign Capital increased its commitment in Mortal Man Inns Limited (MMI) to £5m by way of a fifth round of financing for MMI’s buy & build strategy in the country pub sector.
Sovereign Capital currently has some £175m of funds under management and is in the final stages of raising its third fund ‘Sovereign Capital Limited Partnership III’ which is expected to close at approximately £125m.
Sovereign Capital has specific expertise in the following sectors: outsourcing, support services, facilities management, waste/environmental, leisure, healthcare services and education/training.