TWO of Britain’s biggest care home operators have gone head to head in the battle to buy Ridgmont, in an auction that could value the business at up to £100 million, The Times has learnt.
Southern Cross and Four Seasons, owned by the buyout firms Blackstone and Allianz Capital Partners respectively, are among a handful of parties shortlisted by Graphite Capital, Ridgmont’s venture capital owner. The two buyout firms competed head on to buy Four Seasons in a £775 million battle that was won by Allianz in August.
Deloitte & Touche, the advisory firm running the auction of Ridgmont for Graphite, is expected to tie up a sale within the next two months.
Ridgmont manages 1,300 beds in 29 care homes and is led by its founder, Roger Storey. Mr Storey, who set up Ridgmont in 1995 after a stint as managing director of Associated Nursing Services (ANS), another nursing home operator, will see his stake valued at roughly £10 million if the business fetches £100 million.
A sale at that price would also net a significant profit for Graphite Capital, owner of the Wagamama chain of noodle bars, and Jane Norman, the women’s fashion retailer. Graphite bought Ridgmont from Cinven, a rival private equity firm, for £16 million in June 2001 and holds an 80 per cent stake in the company.
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Allianz and Blackstone are keen to build care home empires and would aim to merge Ridgmont with their present operations to cut costs. A sale to either party would make it the biggest old people’s homes operator in the UK.
Blackstone, in addition to buying Southern Cross in September, agreed to acquire NHP, a rival operator, in November, a deal that the Office of Fair Trading is reviewing.
Private equity firms are keen on the care homes market, which is worth about £10 billion a year and is so fragmented that the largest eight players have just 16 per cent of it.
In a separate healthcare auction, The Times has learnt, Netcare, the South African healthcare provider, is the mystery bidder for a package of about 15 BUPA hospitals that has been put up for sale for up to £100 million.
Netcare, best known in the UK for running NHS-funded mobile hospitals that treat patients with eye problems, is one of two remaining bidders for the hospitals. The other party is known to be Legal & General’s private equity unit.
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The package of BUPA hospitals includes the 50-bed Dunedin Hospital in Reading, which specialises in cosmetic surgery, gynaecology and cardiology. Many of the hospitals for sale own their property and carry out surgery, such as hip and knee replacements, as well as cancer treatment.
Ridgmont includes homes in Birmingham, Doncaster, Huddersfield, Newcastle, Portsmouth and Sheffield.
All parties declined to comment on the sale of Ridgmont.