27th Jul 2007 07:01
CareTech Holdings PLC27 July 2007 For immediate release 27 July 2007 CareTech Holdings PLC ("CareTech" or the "Group") £11m acquisition of Community Support Project Limited CareTech Holdings PLC (AIM: CTH) a leading UK provider of learning disabilitycare services, is pleased to announce the acquisition of the entire issued sharecapital of Community Support Project Limited, together with its wholly-ownedsubsidiary One-Step (Support) Limited, ("One Step") and certain freehold andassociated long leasehold properties for a total consideration of £11.0 millionplus costs ("The Acquisition"). The Acquisition has been part funded by the partial utilisation of the Group'sborrowing facility provided by CareTech's bankers, The Royal Bank of Scotland,which has been increased to £75 million. Following the Acquisition, CareTechwill have net indebtedness of approximately £67 million. The cash element of theacquisition proceeds is £9.0 million, of which £300,000k will be paid in January2008, subject to the attainment of certain financial targets. The remainingconsideration is in the form of 363,637 CareTech ordinary shares issued at aprice of 550 pence per share. Accordingly the Group will apply for admission ofthese shares to be traded on AIM and trading in these shares is expected tocommence as soon as is practicable. The One-Step business was established in 1999 and provides an innovativeapproach to specialist support and accommodation services for adults who do notrequire full time residential care. One-Step also operates an OFSTED-registeredfamily support and assessment centre, located in Reading. The business has atotal of 83 clients. Supported living services are provided to 77 clients ofwhich 13 live in self contained flats (provided from 4 freehold properties) and64 in assured shorthold properties. The assessment centre provides accommodationand support for 6 families. The vendor has been responsible for significant expansion of the business inrecent years and has been retained to further develop the business across theremainder of the CareTech network. Community Supported Project Limited was incorporated in November 2006 as part ofa restructuring of the One Step business. It has not yet filed accounts. Theaccounts of One-Step for the year ended 31 October 2006 show a profit fromcontinuing operations before interest of £786,000 and net assets of £1,568,000. CareTech recognises that One-Step has made further progress during the currentfinancial year and anticipate that the Acquisition will be earnings enhancing. Commenting on the Acquisition, Farouq Sheikh, Executive Chairman, said: "We are delighted to complete the Acquisition; our fourth acquisition sinceflotation, and bringing our client capacity to over 1,000. The One Step servicesare of exceptional quality and offer a good fit with CareTech's strategicobjective to further develop supported living services to complement ourestablished residential care services. The Acquisition further demonstrates theGroup's progress in achieving the growth strategy outlined at flotation. TheBoard continues to evaluate selective acquisition opportunities which willenhance value for our shareholders". Martin Costelloe, the former proprietor of One Step said of this opportunity: "I am delighted that CareTech has offered me the opportunity to remain with OneStep and I look forward to the support and enthusiasm of the management team aswe take the services forward. CareTech has a sound reputation as an excellentprovider and has established a great network amongst commissioners and caremanagers. I believe that the One Step model complements CareTech's services andoffers an attractive range of choices for commissioners". For further information, please contact: CareTech Holdings PLC 01707 652 053Farouq Sheikh, Executive ChairmanDavid Spink, Finance Director Buchanan Communications 020 7466 5000Tim AndersonJames Strong Brewin Dolphin Securities 0845 270 8600Matt DaviesSean Wyndham-Quin Notes to editors: CareTech which was floated on the AIM in October 2005 is a leading provider ofspecialist residential care services to people with learning difficulties('PLD'). CareTech's services are provided through 138 residential care homes and5 day centres located predominantly in the South of England and the WestMidlands. Current overall capacity is 1,025 including 165 in Supported Livingservices together with 229 places in day services. The Company is headquarteredin Potters Bar. Since formation in 1993, the Company has expanded organically through winningtenders and building new homes; and by acquisition - typically asset purchasesof single site care home operations. CareTech's strategy for growth is to takeadvantage of the supply shortage for high standard care services for people witha learning disability places and increase the number of beds and homes itoperates through the development of the existing portfolio, the establishment ofnew homes and by selected acquisition in a fragmented market. ENDS This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
CTH.L