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3i realises 10 year investment in Care Principles

3i today announces that it has agreed to sell Care Principles, the leading UK specialist care provider for adults with learning disabilities and behavioural challenges, to The Delta Fund, to which Three Delta provides corporate finance advisory services. The transaction is valued at £270m.

3i has been an investor in Care Principles since 1997, when a team of managers from General Healthcare approached 3i to help them build and run medium secure hospitals throughout the UK. 3i invested £1.5m at the time for a 38% stake in the business and has worked alongside the business since then, transforming it from a start-up to a profitable healthcare services business with a turnover of £66m, employing more than 1500 staff. In 2005, the founders decided to sell their stake in the business, giving 3i the opportunity to re-invest in the business and support a buyout.

Shortly following the buyout, 3i helped Care Principles acquire Ermine Care, a provider of community-based specialist services for adults, operating three open hospitals and a care home with nursing, as well as a domiciliary supported living service.  Along with Care Principles’ other services, the acquisition provided an integrated ‘pathway of care’ for adults, allowing individuals to move forward through their treatment programmes in order to continue to be cared for in the least restrictive environment appropriate to their needs.

3i’s introduced Paul Preston, former MD of General Healthcare Group’s BMI Healthcare, the leading independent hospital group, as CEO of the group at the time of the buyout in 2005. Nick Irens, former Chairman of Westminster Healthcare took the post as Chairman.

The company now has over 380 occupied beds and employs more than 1500 staff, providing assessment, treatment, care and rehabilitation for adults requiring long-term therapy and treatment for learning disabilities and mental health problems. The majority of patients are sectioned under the Mental Health Act and receive rehabilitation through a combination of nurses and carers with a typical staff to patient ratio of four to one. The average length of stay at a home for an individual is approximately four years.
Mike Turner, 3i Partner commented: “We’ve worked with an excellent management team over the life of our investment and I’d also like to pay tribute to the founders of the business. This transaction delivers us 3.9 times money multiple and an IRR of 61% over the entire 10 year life of the investment.”
Paul Preston added: “3i has demonstrated invaluable support as an investor in our business during a period of organic and acquisitive growth over the last 10 years. I am delighted that the shareholders have been able to realise their value whilst at the same time we look forward to continued development. “

In recent years 3i has had significant success in the healthcare services sector, most notably with investments in Westminster Healthcare, the nursing home operator, Castlebeck, Caretech and Milbury (Paragon), other healthcare providers for adults with learning difficulties. 

About 3i

3i is a world leader in private equity and venture capital.  We focus on buyouts, growth capital and venture capital and invest across Europe, in the United States and Asia. Our competitive advantage comes from our international network and the strength and breadth of our relationships in business.  These underpin the value that we deliver to our portfolio and to our shareholders.

About 3i Buyouts
The 3i European Buyout Business is a leader in the European mid-market.  We lead mid-market buyouts up to €1bn using insight from our local knowledge, international connections, and our sector teams.  Managing €3bn invested in over 60 companies across Europe, the business invests in all sectors, with a particular focus on media, healthcare, business services and Oil, Gas & Power.

3i recently raised a €5bn fund, the largest fund in Europe dedicated to mid-market buyouts. ‘Eurofund V’ will be invested in buyout transactions over the next four years, primarily in Europe.

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