GI does £20m all-equity add on

Fresh from a $1.9bn fund close, the private equity and real estate firm has doubled the size of platform company Care Aspirations.

GI Partners has paid roughly £20 million (€22 million; $32 million) in an all-equity deal for privately-owned Shirebrook Care Group.

The UK-based healthcare company, which runs care facilities for adults with severe learning disabilities, will be folded into exiting GI platform, Care Aspirations. The bolt-on doubles the size GI's care business, which made its original acquisition last year for £58 million. The combined group will employ over 600 people.

Alfred Foglio, GI managing director and chairman of Care Aspirations, said the firm was targeting £10 million of capital expenditure to expand and improve the offering. In total, the firm will have invested less than £100 million in the entire platform, Foglio said. “Traditionally this would have been on the smaller end of mid-market private equity, but I think what we are starting to see now is the larger buyout funds even looking at deals of this size.”

What we are starting to see now is the larger buyout funds even looking at deals of this size.

Alfred Foglio

GI managing director Mark Tagliaferri recently told PERE magazine that the firm was sticking to its model of building up businesses. “We are looking at backing good teams in specialist real estate niches who want to build up a business and which could be something that goes public in the future,” he said.

The US- and Europe-focused firm also recently backed the formation of Urban & Civic, a UK property specialist company, which acquired Alconbury Airfield in November. The firm’s platform pub company, the Orchid Group, has also acquired two smaller businesses as the sector goes through a wave of contraction.

GI is funding the acquisition of Shirebrook entirely from equity committed to GI Partners Fund III, which closed in October after corralling $1.9 billion from investors. Placed by Lazard, the fund attracted commitments from new investors including Partners Group, Capital Dynamics, the Florida Retirement System Trust Fund and the Illinois Teachers’ Retirement System.

Tagliaferri told PERE the fundraise, which fell short of its reported $2.25 billion to $2.5 billion target, was a success given current market conditions. “I look at Hellman & Freidman, which set out to raise $13 billion and raised $8.8 billion. As someone said, they have got 25 years experience of unbroken success, so I think the fundraising has to be taken in the context of market we are in.”