Avery’s management team sells to Southern Cross
The care home company sells off 16 of its 21 homes and plans to set up a new business
The management team behind Avery, the care home company, has sold its stake in the business and will now help create a new company with a private equity backer.
Healthcare group Southern Cross has bought 16 of Avery’s 21 homes in a deal which values the business at £96.5m.
Graphite Capital, which backed the management team led by John Strowbridge and Ian Matthews in October 2005, will now fund a new business called Optimum Healthcare.
It will use the five homes which are not part of the deal as its nucleus and will fund Optimum to the tune of £22m. Graphite has more than doubled its money on Avery and is now keen to use the profits to reinvest in the care home sector.
The new venture has also got the backing of The Royal Bank of Scotland, which is providing debt facilities to support the companies growth.
Strowbridge said: “The five remaining homes have further development potential.
“With this base, Optimum will continue to pursue a rapid expansion strategy to grow a portfolio of high quality nursing and dementia care homes with national coverage.
“Graphite’s financial support and expertise in the elderly care sector will help us to make the most of opportunities as the sector continues to consolidate.”
Graphite Capital partner, Mark Hudson, added: “The sale of the 16 homes demonstrates just how successful John and the team have been with their buy-and-build strategy and enables us to crystallise an attractive return for our investors.
“We are delighted to continue supporting the team as they develop a new portfolio of quality homes in this highly fragmented market.”
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