LGV securitises healthcare business

Legal & General Ventures portfolio company Craegmoor Healthcare Group has completed a £245m refinancing deal ahead of a possible flotation as early as next year.

Craegmoor Healthcare Group, the UK-based care homes and healthcare operator acquired by Legal & General Ventures (L&G) in 2001, has completed a £245m securitisation that enables it to pay down the mezzanine and debt financing that backed the £200m buyout.

The proceeds of the issue, which comprised fixed and floating notes totalling £245m issued by Craegmoor Funding and  which also included £157.5m of AAA-rated paper, will be used to repay existing group debt including all the outstanding notes from the previous securitisation, borrowings under the facilities utilised to fund Craegmoor’s acquisitions and mezzanine loans taken out to fund Craegmoor’s acquisition.


L&G Ventures acquired Craegmoor from US private equity firm Warburg Pincus, backed by mezzanine and debt facilities from Mithras Investment Trust and Royal Bank of Scotland. Craegmoor is majority-owned by L&G with management holding the balance.


The new securitisation will also support Craegmoor’s future growth, L&G said in a statement, which could include a public listing as early as next year. The company has already undergone a sustained period of growth during the past two years, largely through a series of 25 bolt-on acquisitions totaling £80m. The specialist care provider recorded a 20 per cent increase in turnover to £124.6m in 2002, acquiring 51 homes at a total value of £34m. The business currently provides facilities for 5,500 people at 300 locations across the UK.


According to L&G, revenues generated from Craegmoor’s ownership of 265 care facilities (comprising 223 care homes, 16 independent hospitals and 26 supported living units) back the new securitisation.