Castlebeck Care Ltd

13 April 2005

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HgCapital has completed a recapitalisation of its portfolio company Castlebeck care Ltd. To facilitate the refinancing, Royal Bank of ScotlandÂ’s London Corporate and Structured Finance team (RBS) acted as the sole arranger of Â£73m of senior debt, capital expenditure and working capital facilities. RBS also provided Â£9m of capital expenditure to support the ongoing development of the business. HgCapital retains its 85% stake in the business and has returned most of its original Â£20m investment to its investors. Castlebeck Group Ltd has increased its capacity by a third during HgCapitalÂ’s ownership. Jill Ridley-Smith coordinated the refinancing on behalf of HgCapital while Lee O'Donnell, Peter Brown and James Hay represented The Royal Bank of Scotland's London Corporate and Structured Finance team in the transaction and Andrew Branchflower acted on behalf of the Corporate Banking London Healthcare team.

Previous funding

HgCapital backed the secondary buyout of Castlebeck Care in 2002 (5 August 2002, page 31), in a deal that provided an exit for 3i. The size of the deal was not disclosed but press reports estimated it to be in the region of Â£45m-Â£55m. Four members of the companyÂ’s management team and Chris Sandham, a buy-in candidate, also invested in the deal, which was unratcheted, and acquired the remaining 15% of the companyÂ’s equity. Bank of Scotland provided a debt package to complete the funding, comprising mezzanine with a warrant into the equity and senior debt. Deloitte & Touche initiated the deal.