16th Aug 2018 10:23
LONDON (Alliance News) - CareTech Holdings PLC and Cambian Group PLC on Thursday said they have finally agreed a deal which will see the former take over the latter.
This comes a few weeks after the UK Panel on Takeovers & Mergers had pushed back the deadline for CareTech to make a firm offer to Thursday.
CareTech is to pay 100 pence in cash, and 0.267 of a CareTech share, per Cambian share, though there is a full cash alternative worth 190p.
Cambian shares were 0.8% higher on Thursday at 192.00p, with CareTech shares 0.7% up at 377.00p.
The deal values children's services provider Cambian at GBP372 million on a fully diluted basis and GBP289 million on an enterprise value basis.
The enlarged group will be called CareTech Holdings PLC, though the Cambian brand will stay, and Cambian shareholders will own around 34% of the new company.
CareTech said the deal will bring cost savings of around GBP6 million a year by its year ending September 2021.
In July, CareTech had proposed the agreed amount, having originally made a proposal worth 220p per share, or 200p all in cash.
CareTech Executive Chairman Farouq Sheikh said: "We are delighted to announce this recommended offer for Cambian. CareTech and Cambian are highly complementary and the combination of the two businesses will create the opportunity to improve outcomes for existing and future service users, to better serve care commissioners, to enhance opportunities for staff and to drive the focus on quality.
"The financial rationale for the transaction is compelling in its potential to generate value for both CareTech shareholders and Cambian shareholders. At the same time, the larger size of the enlarged group means that more funds will be made available to the CareTech Charitable Foundation to accelerate its important work in giving back to the most disadvantaged communities."