Exclusive: Alantra to test market with Balhousie Care

Balhousie Care Group, one of Scotland’s largest care home groups, is reviving sale plans delayed by the pandemic, multiple sources told HealthInvestor UK, in a deal that could top £90 million.

Mid-market investment bank firm Alantra will be running the process, HealthInvestor UK can reveal.

A spokesperson for Balhousie Care Group tells HealthInvestor UK: “Our chairman Tony Banks has had on-and-off discussions with business investors since Balhousie Care Group was formed 30 years ago. This is not unusual for any company, and in particular, one that has seen such growth and success as Balhousie Care Group. We can confirm that Alantra was appointed to look at all available options for Balhousie in order to facilitate our company’s next phase of growth.”

A source close to the matter describes the upcoming process as a “good opportunity”. Scotland is a market with consistency, occupancy levels are sustained, and staff wages are better than the UK average, according to the source.

To date, Balhousie has been founder-owned. Tony Banks established the group 30 years ago. The group operates 26 homes across six regions of Scotland today, providing care to more than 900 residents. It recently appointed former HC-One and Four Seasons Health Care director John Kirk as deputy chief executive.

According to market sources, there was a deal in place in 2021 to acquire the business but it fell through. Balhousie was targeting a £100 million offer back then. But the upcoming process is more likely to value the group at £85-90 million, an operator source estimates adding that “the potential buyer will be either a private equity firm or a REIT”.

A second source adds: “Balhousie is a decent-sized group, and I wouldn’t be surprised to hear the new owner will be a national provider – by that, I mean Scotland, England, and Wales. It is also likely to be PE funded…”

“Where there are leaseholds rather than freeholds, this would impact valuations,” both sources agree.

Date published: January 18, 2022

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