Graphite Capital has committed a funding package worth £53 million (€66 million; $83 million) to develop Willowbrook Healthcare, a new company formed in partnership with care home entrepreneurs John Strowbridge, Ian Matthews and Roger Storey.
The three-strong management team has twice before been backed by Graphite; the firm previously invested in Optimum Care, which currently has five homes with a further nine homes under development, and Avery Healthcare, which was sold to Southern Cross in 2007 for £96.5 million.
The development capital package comprises a £23 million equity commitment from its most recent fund, Graphite Capital Partners VII, and a £30 million debt facility led by Royal Bank of Scotland alongside Allied Irish Bank and Bank of Ireland.
A statement from Graphite said the firm would likely seek further capital as Willowbrook grows.
Willowbrook will operate using the same strategy as Optimum Care, which both developed new nursing and dementia care homes and acquired existing homes. Both Optimum and Willowbrook will trade under the Avery name, which was retained following last year’s sale to Southern Cross.
“The turbulence in capital markets has made investments of this nature more difficult to complete, but we are committed to the sector over the long term,” said Graphite partner, Mark Hudson.
Graphite invests in the UK mid-market across a number of different sectors. In July, the firm sold Summit Medical, a medical device manufacturer, to The Riverside Company for £36 million.