M&A trade activity

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Outcomes First Group acquired the following two companies:

  1. Bryn Melyn Care (BMC), a leading provider of therapeutic residential care, independent education, and integrated clinical services for children and young people with multiple and complex needs, in October
  2. Next Steps Fostering services from the Ward family, including sister companies Ryancare in London and Safehouses in Norfolk, in September
  • Partnerships in Children’s Services (PICS), which cares for about 1,100 children, was acquired by Core Assets Group (CAG) in January 2019 for circa €111m (£100m). Core Assets, which provides a range of fostering and adoption care services, will acquire about 4-5% of the market, supporting c.3,000 children a year. The new network created as part of this deal brings together a number of the UK’s leading fostering and children’s services agencies including CAG’s Core Assets Children’s Services, Foster Care Associates, Fostering People, Active Care Solutions, Adopters for Adoption and LCS (Leaving Care Solutions), alongside PICS’ Clifford House, FosterPlus, ISP and Orange Grove. The newly merged Group has subsequently rebranded as Polaris
  • In January 2019, Swanton Care (backed by Apposite Capital), a diversified provider of care and educational services, acquired Courtyard Care, a group of four specialist residential care homes for children and adults up to 18 years old with complex mental health needs
  • CareTech Holdings PLC completed the circa €412m (£372m) acquisition of Cambian Group PLC in October 2018. CareTech provides social care and support services for children, young people and adults in the U.K., while Cambian is engaged in providing specialist educational and behavioural health services for children
  • Keys Group Limited, the UK-based care and education provider for children and young people, acquired Kingdom Care Childrens Homes Ltd, the UK-based company that operates children's care homes, from private investors for an undisclosed consideration. The acquisition enabled Keys Group to enhance its position as a leading, independent provider of specialist residential care for young females with complex needs. It also extended Keys Group’s service offer to local authorities in the South East and the London borough. The deal completed in February 2018

Looking ahead

The fragmented UK children’s services market will generate significant opportunities for investors with increasingly positive market drivers. These include a highly defensible market, favourable demographics, a growing UK population exposed to risk factors and a greater awareness of domestic abuse through high-profile cases. Demand for children’s services has spiked as a consequence of the COVID-19 pandemic, with the lock down causing an increased demand for essential services for looked after children. The fallout from the COVID-19 pandemic will continue to unravel, relocating emergency/short-term child placements to more suitable accommodation for the medium-to-long term, making it a very active sector.

The children’s services market will continue to be desirable with providers looking to consolidate, build economies of scale, and diversify into adjacent services including schools, foster care and residential care, providing a one stop solution to commissioners. PE and trade buyers will remain attracted to the sector, given the opportunity to grow rapidly through rollout and consolidation.

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