Shares digital

by Rachel Robson

Learning disability care services provider CareTech has acquired Beacon Care Investments, a provider of specialist services for adults with learning difficulties, for up to £22.5 million. Of this total, £18.6 million is payable upon completion of the deal and will be satisfied by a cash payment of £15.6 million and by the issue of 600,000 shares of 0.5p each in CareTech.

The shares are being issued to the vendors at a price of 500p per share. Following the achievement of performance targets, a further deferred consideration of up to £3.9 million will be payable in cash. Beacon has 16 homes located in the south east, with a total capacity of 111 beds, and all properties are freehold.

The deal is being funded from partial utilisation of CareTech’s new £120 million bank facility provided by the Royal Bank of Scotland and Allied Irish Bank in April. Following the acquisition, CareTech will have net indebtedness of around £99 million. The deal is expected to be earnings enhancing in the first full year of ownership.

CareTech also recently issued a promising half-year update, reporting that trading in the first half of the financial year was in line with expectations. The acquisitions of Counticare and One-Step made last year have also now been fully integrated into the regional structure introduced in 2007.

CareTech remains confident that the recent credit market turmoil, greater regulation and a focus on the quality of care which favour larger operators, has further enhanced consolidation opportunities for the group.

Shares says: CareTech is expanding rapidly and further growth is likely this year.