30th May 2006 07:02
CareTech Holdings PLC30 May 2006 For Immediate Release 30 May 2006 CareTech Holdings PLC ("CareTech" or the "Group") £15m Acquisition of Lonsdale (Midlands) Limited comprising 159 beds and 24 day care places CareTech Holdings PLC, a leading UK provider of learning disability careservices, is pleased to announce the acquisition of the entire issued sharecapital of Lonsdale (Midlands) Limited ("Lonsdale") for a net cash considerationof £15 million. Lonsdale provides a range of specialist services for adults with learningdifficulties including residential and nursing care, supported living schemesand day care facilities. Lonsdale has a total capacity of 159 beds and 24 daycare places comprising services provided at 28 locations, the majority of whichare freehold or long leasehold properties. The acquisition will be integratedwith CareTech's existing 23 homes in the West Midlands. The acquisition has been funded from partial utilisation of the Group's £50million bank facility provided by the Company's bankers, The Royal Bank ofScotland. Following the acquisition of Lonsdale, CareTech will have netindebtedness of approximately £34 million. The accounts of Lonsdale for the year ended 31 July 2005 (being the latestperiod on which Lonsdale's accountants have reported) show a loss fromcontinuing operations before exceptional items, interest and taxation of£1,455,000 and net assets of £3,135,000. Since July 2005, Lonsdale has grown itsrevenues by approximately 25% and significant head office costs which wererecorded in 2005 will not be incurred following CareTech's acquisition. The Directors anticipate that the acquisition will be earnings enhancing in thecurrent financial year. Following completion of the acquisition of Lonsdale, CareTech now operates 115residential care homes with a total capacity of 735 residential places togetherwith 4 day care centres with a capacity of 79 day service places. Commenting on the acquisition of Lonsdale, Farouq Sheikh, Executive Chairman,said: "We are delighted to welcome Lonsdale to the Group, our second major acquisitionsince flotation. The Lonsdale deal follows closely behind the acquisition ofDelam Care which was announced earlier this month and further demonstrates theGroup's progress in achieving the growth strategy outlined at flotation. Thisstrategic acquisition complements our organic growth programme and offers acornerstone for further development in the West Midlands. CareTech has nowincreased bed capacity since IPO by 300 beds (amounting to 69% growth), throughorganic and acquisition initiatives. The Board continues to evaluate selectiveacquisition opportunities to enhance value for our shareholders." Contacts: CareTech Holdings PLC 01707 652 053Farouq Sheikh, Executive ChairmanDavid Spink, Finance Director Buchanan Communications 0207 466 5000Diane StewartTim Anderson 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 adults with learning difficulties (PLD),which refers to people with physical and mental handicap. CareTech's servicesare provided through 115 residential care homes and 4 day centres locatedpredominantly in the South of England and the West Midlands. Current overallcapacity is 735 beds in residential services and 79 places in day services. TheCompany's headquarters are in Potters Bar, Hertfordshire. 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:
CTH.L