CMG considers sale of specialist care business

Thu, 05 Apr 2018

The owners of the Care Management Group (CMG) have engaged an investment bank to help explore the sale of its dedicated care business in a deal expected to be worth around £150 million to £250 million.

CMG, which is mostly owned by Chai Patel’s Court Cavendish, another care home company, currently has 181 properties in the UK and Wales, an even mix of supported living and residential care homes, with ann occupancy rate of 90 per cent.

At current estimates, CMG could hope to get up to £250 million for the business, which has recorded 20 per cent growth in revenues on a yearly basis since 2015. Care homes alone delivered the group full-year revenues of £79 million and EBITDA of £20 million.

CMG was founded in 1996 by a parent looking after a child with learning disabilities. Court Cavendish, a specialist advisory group funded chiefly by Patel, then bought the business in 2008 and has invested heavily since then.

In a sector that has seen a lot of businesses change hands in recent months, the move is
being perceived as a good opportunity for CMG to make a decent profit on the division.

Patel himself scooped up 122 care homes for his company HC-One from fellow provider Bupa in August 2017, parting with £500 million to see the deal through.

An industry insider told Property Week: “They [had] already tried to sell the business in 2015.

“Now it is a good time to exit, as some of the largest infrastructure funds are moving into the market. There is a new pool of buyers that have decided to move into the space.”

Rothschild refused to comment on their reported involvement in the deal.

A spokesperson for CMG said that, while the company would not lend credence to rumours in the market, it could said this: “What is true is that we are exploring a wide range of options for the future strategy of this business.”

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