04/04/2019 - News

Clearwater International closes five care services deals in four months

Over the last four months, Clearwater International’s Healthcare team has completed five transactions in the health and social care sector across Europe.

The latest completion was in the specialist residential care sector:

  • The UK team advised a business which specialises in the provision of nursing and residential care services for people with mental health issues, learning disabilities, acquired brain injury, challenging behaviour and early onset dementia. In a competitive sale process the business was sold to a strategic buyer structured as a Real Estate Investment Trust (REIT).

The UK team has also completed deals in the foster care and residential children’s care space:

  • Advising Partnerships in Children’s Services on joining forces with Core Assets Group to create the UK’s exemplar national specialist fostering network;
  • Advising Waterland Private Equity on its acquisition of Sandcastle Care, a residential child care provider with a therapeutic approach.

The healthcare team also completed two deals in the specialist clinics space:

  • In France, the team advised private clinic operator Groupe Polyclinique du Parc Rambot on its sale of a minority stake to Groupe Saint-Gatien;
  • The French team also advised 5 Santé, an expert in the rehabilitation of patients with chronic disease, on financing for the acquisition of the Gustav Zander clinic.

These deals follow on from strong activity in the health and social care space across Europe in 2018, with highlights including:

  • Advising Primonial REIM on the €1,635m acquisition of a 50% interest in a healthcare real estate portfolio in Germany from Medical Properties Trust (REIT). According to REFIRE(German Real Estate Finance), this was one of Europe’s largest Healthcare Real Estate transactions of 2018;
  • Advising Bridgepoint and other shareholders of the C2S Group, a private clinic operator in France, on the sale of the group to Eurazeo Patrimoine.

The UK is currently showing strong signs of continued growth in health and social care provision, which is a trend we are seeing globally. Factors that are expected to propel market growth in the UK are the increasing population, ageing demographics, heightened awareness of mental health issues and the rise of government initiatives around adult and child learning disabilities and mental health. We have seen several high profile acquisitions recently in the UK: Cambian Group was acquired by CareTech; Regard Group which is backed by AMP (an infrastructure fund) acquired Care Management Group; and Choice Care Group was acquired by ICON (another infrastructure fund) - providing evidence that there is continued funding available for high quality assets in the health and social care market.

Private equity has also shown a continued interest in highly defensible government funded services like foster care and residential care, especially demonstrated by August Equity’s investment in Esland Care, Waterland’s investment in Sandcastle Care, and CapVest’s acquisition of Foster Care Associates. Over the next 12 months, we expect to see a resurgence of interest in high quality care providers in children’s services from the independent sector which require growth investment.

Ramesh Jassal, International Head of Healthcare, Clearwater International, commented: The UK is showing strong evidence of REITs moving outside of the traditional elderly residential care real estate market and into more specialist areas, serving people with complex conditions who receive 100% state funding and have life-long conditions. On a wider point, defensible government funded services will continue to attract infrastructure and financial investors – as displayed by our recent work in children’s services.”

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