Alkare (United Kingdom) - Oct 2007

unquote
01 October 2007

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Sovereign Capital has invested an undisclosed sum in portfolio company Alkare Ltd, a residential care provider for adults with mental health needs and learning difficulties, to fund the firm’s acquisition of rival mental healthcare provider Positive Lifestyles Ltd. Sovereign purchased Alkare in a £22m buyout in March 2006, with a debt package supplied by Lloyds TSB Acquisition Finance (14 March 2006, page 26). The debt providers have supplied further financing for this latest transaction, which was sourced through a direct approach following the initial buyout deal. The investors intend to continue the company’s growth organically, with three planned rollouts due in the coming months, two of which are newly developed nurse-led therapy centres.

Company

Swansea-based Alkare was founded in 1998 to provide residential care for adults with mental health needs and help them make the transition from hospital into more independent living in the community. Positive Lifestyles, established in 2001, is the leading provider of residential mental healthcare in Cardiff. The company works closely with authorities across South Wales and currently rehabilitates 32 clients across nine homes. The combined turnover for the two companies in the year ending March 2007 was approximately £5.7m, with an EBITDA of around £1.8m. The company currently employs a total of more than 80 staff. Alkare has already seen significant organic growth since Sovereign’s initial investment, with several new homes opening and continued development of the services on offer. The business currently has a turnover of £3.5m with an EBITDA of more than £1m.

People

Dominic Dalli led the deal for Sovereign, while Martin Cordey represented Lloyds TSB Acquisition Finance

Advisers

Debt - Martineau Johnson, Alistair Hardie (Legal)Equity - DLA Piper, Jim Lavery (Legal)Equity - Hazlewoods, Andrew Brooks (Financial Due Diligence)

Sourced from: UK & Ireland unquote" 355 (Oct 2007)