3rd May 2006 07:02
CareTech Holdings PLC03 May 2006 For Immediate Release 3 May 2006 CareTech Holdings PLC ("CareTech or the Company") Acquisition of Delam Care Ltd - 14 homes (inc. 12 freehold) totalling 74 beds inStoke and South Staffordshire CareTech Holdings PLC, the leading UK provider of learning disability careservices, is pleased to announce the acquisition of the entire issue sharecapital of Delam Care Limited and related properties (together Delam Care) for anet cash consideration of £8.1 million. This represents an enterprise value of£7.6 million plus cash of £0.5 million in the balance sheet of Delam CareLimited at completion. The acquisition has been funded from the partial utilisation of a new £50million bank facility provided by the Company's bankers, The Royal Bank ofScotland. Including the cash consideration payable in respect of theacquisition of Delam Care, CareTech will have net indebtedness of approximately£16.3 million. Delam Care is a residential care services provider for adults and children withmental and learning disabilities. Delam Care operates 12 freehold homes in theStoke-on-Trent and South Staffordshire region with a total of 66 residentialplaces and additionally provides domiciliary care and supported living care for8 individuals in 2 further homes. The acquisition will be integrated withCareTech's existing 9 homes in the West Midlands. The accounts of Delam Care Limited for the year ended 30 April 2005 (being thelatest period on which Delam Care's accountants have reported) show profit fromcontinuing operations before exceptional items, interest and taxation of£255,178 and net assets of £1,018,131. However, these figures are notrepresentative of the business being acquired by CareTech as the majority ofDelam Care's activities were acquired on 30 November 2004, and so these figuresaccount for only five months' trading. Furthermore, Delam Care's homes are heldoutside the trading company, Delam Care Limited, and so the profits of DelamCare Limited are reported after a rental charge payable to the owners of theproperties and the properties themselves do not appear in Delam Care Limited'sbalance sheet. CareTech has acquired both the properties and the tradingcompany, Delam Care Limited. The Directors anticipate that the acquisition will be earnings enhancing in thecurrent financial year. Following completion of the acquisition of Delam Care, CareTech now operates 78residential care homes with a total capacity of 536 residential places (comparedwith 61 homes with a capacity of 435 residential places at the time of theflotation last October) together with 2 day care centres with a capacity of 55day services places. Commenting on the acquisition of Delam Care, Farouq Sheikh, Executive Chairman,said: "I am delighted with the completion of the Delam Care acquisition; this isa long established business with a proven team and a track record of deliveringhigh quality services.This acquisition brings the total capacity of new bedsadded in the year to 101 and demonstrates our ability to acquire quality assetsat attractive valuations and so deliver the consolidation strategy outlined atflotation. There continues to be strong demand nationwide for our services anda visible pipeline of development and acquisition opportunities which theCompany continues to target. " Contacts:CareTech Holdings PLC 01707 652 053Farouq Sheikh, Executive Chairman Buchanan Communications 0207 466 5000Tim AndersonDiane Stewart Brewin Dolphin Securities 0845 270 8600Matt DavisAndrew Emmott Notes to Editors: CareTech which was floated on AIM in October 2005 is a leading provider ofspecialist residential care services to adult people with learning difficulties(PLD). CareTech's services are provided through 78 residential care homes and 2day centres located predominantly in the South of England and the West Midlands.Current overall capacity is 536 beds in residential services and 55 places inday services. The Company is headquartered in 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 care standard PLD places and increasethe number of beds and homes it operates through the development of the existingportfolio, the establishment of new homes and by selected acquisition in afragmented market. - ENDS - This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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