BUPA sells off 122 UK care homes to Dubai-backed company for £300m

Major UK private healthcare provider BUPA UK has sold almost half of its residential care home inventory — some 122 homes, retaining around 170 — to Dubai-backed HC-One, in a deal worth £300m.

The acquisition means that HC-One, acquired by investors Court Cavendish, Formation Capital and Safanad in 2014, has now become the UK’ biggest operator of residential homes.

HC-One chairman, former NHS doctor Chai Patel, said that the company is now owner of around 350 care homes, with 22,000 care beds.

HC-One will be left with £500m of debt, against a turnover of £675m as a result of the deal.

Patel described the deal as “financially sustainable”, pointing out that ownership of the homes was worth £1bn and that investors should not be alarmed. “It’s a prudent position, we are double-covered from the value of the properties,” he said.

HC-One has seen rapid growth, recently acquiring 50 homes from Meridian and Helen McArdle Care. The equity for the deal has been provided by Dubai-based investment firm Safanad and US property group Stepstone. The debt has been arranged by Deutsche Bank and Apollo.

BUPA still a ‘major investor’

BUPA remains active in the sector with the balance of its care home inventory, as well as six retirement villages, caring for some 9,000 residents.

BUPA chief executive David Hynam (pictured left) emphasised the group’s commitment to the sector despite the deal, stating that BUPA would still be “a major investor” in residential care.

It plans, he said, to spent more than £120m of refurbishing and building care homes this year alone, a 20% increase on last’s year’s spend in this area.

HC-One emerged from the collapse of Southern Cross in 2011, which did not own its homes, but the industry seemed broadly to welcome the deal.

Eugene Costello
Eugene Costello has been a journalist for some 20 years, and has written for a wide variety of UK and international newspapers and magazines.

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