An Irish-controlled company is on the verge of becoming the UK's biggest private healthcare player in a €760 million deal.
Barchester, a nursing home operator chaired by former Kerry Group boss, Mr Denis Brosnan, announced last night that it had agreed to buy its larger rival, Westminster Care Holdings, for £525 million sterling (€756.6 million) from venture capital group 3i.
AIB, Bank of Ireland and HBOS were part of a Royal Bank of Scotland-led consortium that provided debt finance for the deal. US bank JP Morgan advised Barchester on the transaction.
Media reports named Barchester as a possible suitor for Westminster two months ago. The Irish-controlled company saw off competition from venture capital players Blackstone, Charterhouse and Allianz private equity, as well as British health insurer BUPA.
The deal will create a group with more than 10,000 beds at 163 locations throughout the UK. The company said that this would make it the biggest provider of privately paid-for beds in the UK.
The two companies expect to have combined revenues of £265 million this year and have a total workforce of more than 8,000.
Along with Mr Brosnan, Barchester is owned by 140 - mainly Irish - shareholders. They include bloodstock and horseracing magnates Mr John Magnier and Mr JP McManus.
Their close associate, the financier Mr Dermot Desmond - who is involved in a number of private and public companies in the Republic including health insurer Vivas which is being launched today - is also a shareholder.
Barchester's holding company is a Jersey-based entity, Grove Ltd.
The company's chief executive is Mr Mike Parsons. He took over that role 10 years ago after merging his own healthcare business, County Life Care Centres, with Barchester.
Before establishing that company, Mr Parsons was in the advertising and marketing business. In 1985, he sold his own London-based agency, KHBB, to Saatchi & Saatchi. He worked as a Saatchi executive for five years before resigning to establish County Life.
Mr Parsons described the two companies' geographic fit as perfect.
"Westminster offers opportunities in parts of the UK where we are not adequately represented," he said. "The business has been well-managed but we see scope for further improvement."
Mr Brosnan said the deal was a transformative event for Barchester. "It creates a group with critical mass and an unrivalled position at the premium end of the market," he said.
Mr Brosnan has been involved with Barchester since its foundation in 1993.
The company is focused on the premium end of the market, providing accommodation for elderly people, individuals with learning difficulties, younger disabled people and dementia sufferers.
