29th Apr 2008 07:01
CareTech Holdings PLC29 April 2008 For immediate release 29 April 2008 CareTech Holdings PLC Acquisition of Beacon Care Holdings Limited and Beacon Care Investments Limited(together "Beacon")(the "Acquisition") CareTech Holdings PLC (AIM: CTH) ('CareTech' or 'Group'), a leading UK providerof learning disability care services, is pleased to announce the acquisition ofthe entire issued share capital of Beacon together with 16 freehold propertiesfor up to £22.5 million. Consideration of £18.6million is payable on completionand will be satisfied by a cash payment of £15.6million and by the issue, to thevendors, of 600,000 ordinary shares of 0.5 pence each in CareTech ("OrdinaryShares"). The shares are being issued to the vendors at a price of 500 pence perordinary share. Deferred consideration of up to £3.9 million in cash will becomepayable to the vendors following the achievement of certain performance targets. Beacon provides a focussed range of specialist services for adults with learningdifficulties including residential care and supported living schemes. Beacon has16 homes located in the South East, with a total capacity of 111 beds. All ofthe properties are freehold. The Beacon services have a strong geographic andoperational fit with CareTech's existing portfolio and will be integrated intoCareTech's Southern region. The Directors believe that Beacon will bring tothe Group a successful management team and additional clinical expertise thatwill complement the existing regional care team. The acquisition has been funded from partial utilisation of the Group's new£120m bank facility provided by the Royal Bank of Scotland and Allied IrishBank. Following the acquisition of Beacon, CareTech will have net indebtednessof approximately £99million. The accounts of Beacon for the year ended 30 December 2006 (being the latestperiod on which Beacon's accountants have reported) show a profit fromcontinuing operations before exceptional items, interest and taxation of£315,343, turnover of £7,304,247 and net assets of £1,981,102. These figuresinclude certain costs that will not be incurred under CareTech's ownership. The Directors of CareTech anticipate that the Acquisition will be earningsenhancing in the first full year of ownership. Recent studies highlight the continuing under supply of specialist residentialcare places and the business opportunities offered through supported livingschemes. The Directors consider CareTech to be well positioned through thebreadth of services it offers and its reputation for quality care to deliver thesolutions being sought by care commissioners looking to place vulnerable people.The Acquisition reinforces CareTech's leading position in this growing marketand brings additional network opportunities and development skills. CareTech remains committed to delivering value for its shareholders throughorganic growth and earnings accretive acquisitions. The Directors believe thatconsolidation opportunities open to CareTech have been enhanced by the currentcredit market turmoil, greater regulation and a focus on the quality of carewhich favour the larger operators. Commenting on the Acquisition, Farouq Sheikh, Executive Chairman, said: "We are delighted to welcome Beacon to the Group. The acquisition will furtherstrengthen our position in Southern England and increase our portfolio ofquality freehold assets. I believe that the Beacon team will complement and reinforce our existing teamin the southern region adding in particular in-house clinical support which isincreasingly required to support people with more complex requirements. The Directors' believe that CareTech's ability to secure additional debtfacilities at attractive terms, despite the current credit market, underlinesboth the strength of CareTech's business model and the attractiveness of theconsolidation opportunities. The Board will continue to evaluate furtherselective acquisition opportunities that will deliver outstanding results forour clients and enhance shareholder value". For further information, please contact: CareTech Holdings plc 01707 652 053 Farouq Sheikh, Executive Chairman David Spink, Finance Director Brewin Dolphin Investment Banking 0845 270 8600 Matt Davis Sean Wyndham-Quin Buchanan Communications 020 7466 5000 Tim Anderson James Strong ENDS This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
CTH.L