Duke Street backs Air Products homecare carve-out

Alice Murray
04 December 2013

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Duke Street has backed the management buyout of NYSE-listed Air Products & Chemicals' UK homecare business.

According to Duke Street partner Charlie Troup, who led the deal, Air Products was looking to divest its home oxygen services-focused business around the world, and the private equity house was keen to pick up the UK and Ireland division.

The carve-out took around 18 months to complete because of legal and structural complexities. Duke Street gained exclusivity on the deal at an early stage.

The investment was structured as a classic deal-by-deal, with equity coming from the GP and a co-investor. The financial structure of the deal was arranged prior to Duke Street's tie-up with Tikehau, so did not use cash from its recently developed fund that will enable the investor to act mroe swiftly on new deals.

According to Troup, Duke Street will support the new company's growth by building on its domiciliary care activities. The buyout house believes that as domiciliary care is increasingly favoured by the government as a better and more cost effective way of patient care, Air Product's homecare business is well-placed to take advantage of increased demand in this sector. Duke Street plans to add more services onto the existing business, and will also look to develop its telehealth offering.

Company
Following the deal, Air Products' homecare business has changed its name to Baywater Healthcare.

The company supplies home oxygen, sleep apnoeatherapy, ventilation and tele-health services to patients at home. The business serves more than 25,000 patients and holds a number of public healthcare contracts with the NHS in the UK and the HSE in Ireland.

Home Oxygen Services delivers oxygen to patients at home through a cylinder or a concentrator. The company receives orders from patients and clinicians through its call centre. Patients served typically suffer from chronic obstructive pulmonary disease or congestive heart failure.

People
Adam Sullivan is CEO of the newco. Charlie Troup, partner at Duke Street, led the deal alongside investment director Ben Long.

Duke Street has installed Douglas Quinn as the company's new chairman and Howard Jones as finance director.

Advisers
Management – Altium, Simon Lord, Chris Hopwood (Corporate finance); Turner Parkinson, James Sheridan, David Hayes (Legal); Grant Thornton, John Loebl (Tax).