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.
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.
Care England chief executive Martin Green said residents and their families should not be unduly concerned, telling London’s Evening Standard that the takeover was “a good deal.”
He added, “It ensures those services are not lost to the sector. HC-One is a large organisation investing in quality care so we’re going to see those services maintained.”
And the union representing the most employees in the healthcare sector, the GMB, gave its blessing to the move. Sharon Wilde, GMB National Officer, said that the union has always had a “good working relationship” with HC-One and that it hoped that the takeover would be “a positive step” for both residents and staff.
She added that the union was due to meet with HC-One to discuss the deal.