PE-backed McCarthy & Stone in refinancing

Ellie Pullen
21 August 2013

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Retirement home developer McCarthy & Stone т which is backed by a consortium of investors believed to include Goldman Sachs, TPG and Alchemy Partners т has refinanced its existing debt.

The refinancing package includes a new equity injection from the company's 24 existing institutional investors, totalling £367m. According to Reuters, Goldman Sachs, TPG and Alchemy now own a stake in excess of 50%.

Using the capital injection, the company paid off £510.3m in loan notes and completed an £8.6m debt-for-equity swap. The transaction has lightened the company's heavy debt burden by £350m. Around £160m's worth of debt was refinanced by a new five-year loan facility, provided by the company's existing shareholders.

The business has reportedly attracted a fair amount of private equity interest recently. Blackstone and CVC are among the GPs said to have been considering bidding for the company when it was in the midst of a strategic review. The company is now thought to be planning for a flotation.

Previous funding
McCarthy & Stone was delisted from the London Stock Exchange in March 2006 by a consortium of backers led by Halifax Bank of Scotland under the name Mother Bidco. The consortium paid £1.1bn for the company and fought off rival group Mars Bidco, according to unquote" data.

According to the FT, in 2009 Lloyds Banking Group was left holding a 25% stake in the company following a debt-for-equity swap. The bank then sold its stake to TPG and Goldman Sachs.

Company
McCarthy & Stone is headquartered in Bournemouth and was founded in 1963. The company develops retirement homes across the UK and has built 45,000 apartments in the country to date. McCarthy & Stone recorded revenues of £257.7m for the year ending in August 2012, as well as an EBITDA of £39.9m. The company employs approximately 700 staff.