AMP Capital in talks to acquire CMG

Claude Risner (Mergermarket), Brendan Malkin (Inframation), and Rory Gallivan (Inframation)
05 November 2018

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AMP Capital is in exclusive talks to acquire Care Management Group (CMG), sources told Unquote sister titles Inframation and Mergermarket.

The transaction would be the Australian manager's second move into the UK care sector.

CMG's owner, Court Cavendish – the investment vehicle of healthcare entrepreneur Chai Patel – mandated Rothschild to sell the business earlier this year. CMG provides care homes and other services for people with learning disabilities.

Reports said the valuation is expected to be around £100m, but industry observers said they expect the sale price to be in line with recent valuations in the range of 10-15x EBITDA. CMG's EBITDA is around £15-20m, sources said.

AMP made its first move into the UK care home sector last year, announcing its purchase for an undisclosed fee of Regard Group, the UK's fourth largest specialist care provider.

Regard Group provides supported living, residential and day services from more than 159 locations in England and Wales.

CMG has 140 care homes and other facilities concentrated in southern England and South Wales.

The areas Regard Group and CMG operate in geographically overlap to a large extent, so an acquisition of CMG could help AMP's strategy of increasing Regard Group's service offering in the local authority area in which it operates.

Aside from AMP, another infrastructure investor backing the UK care home sector is Antin, which owns Hesley Group and Kisimul, a provider of care homes and support services for children and young adults with special educational needs.

Meanwhile, Icon Infrastructure last month agreed to buy Choice Care Group, which provides residential and supported living services for people with learning disabilities and mental health conditions, from investment trust Caledonia Investments for an enterprise value of £152.5m, or around 12.5x EBITDA.

Another UK care home provider on the market is Barchester Healthcare, which received an indicative bid from Macquarie Infrastructure and Real Assets, Mergermarket reported last month.