Granville Baird Capital Partners has invested £9 million (€13.5 million; $16.8 million) for a 70 percent equity stake in the £22.4 million management buyout of Castlecare Group Limited.
UK-based Castlecare provides education, residential care and treatment programmes for young people with serious behavioural problems. The company employs more than 300 staff and currently has 25 homes throughout England and Wales.
Barclays Leveraged Finance provided £8 million of acquisition finance and the remainder was made up of management’s stake and transaction costs. The deal was led for Granville Baird by director Andrew Ferguson.
Commenting on the transaction, Ferguson said in a statement: “The management team at Castlecare have extensive knowledge of this fast growing specialist market. We are pleased to be supporting them as the company develops its service offering.”
The management team was recently boosted by the appointment of Michael Smith as chairman. Smith, who spent 24 years at UK private healthcare provider BUPA and has held a number of non-executive directorships at other private healthcare groups, will take up his role following the MBO.
The healthcare sector and associated services has provided a surge of recent interest for private equity firms. Last week, Alchemy Partners sold UK nursing home operator Four Seasons to Allianz Capital Partners for £775 million.
In May, a consortium led by Texas Pacific Group acquired IASA Healthcare, a US-based operator of acute care facilities, for $1.4 billion. In April, Inflexion Private Equity led the £13 million buyout of Healthcare Knowledge Systems International, a provider of healthcare information services to hospitals.