Sale of homecare business nets Sovereign rich returns

Complete Group, which provides care in the home to people with severe long-term illnesses or disabilities, has been acquired by homecare group Claimar Care for £33.1 million.

The sale provides an exit for Complete’s private equity investor Sovereign Capital, returning 5.7 times its original investment, or an IRR of 51 per cent.

Sovereign invested in the management buy-out (MBO) of Complete in 2002, backing managing director Barbara Scandrett, a former dinner lady, and her team. Since the £5.7 million MBO Complete has doubled the number of clients it cares for to 200 and acquired Paediatric Nursing Link, which focuses on the provision of care to children mainly within the M25.

To help fund the acquisition, AIM-listed Claimar is to raise £23 million net of expenses through a placing of 18.2 million shares at 137p, which will represent 36.5 per cent of the company’s enlarged share capital. It is also taking on more debt, with a new term loan of £11 million and revolving credit facility of £14.5 million both granted by the Royal Bank of Scotland.

This is the third exit from Sovereign’s first fund (SCLP I), which contains nine further investments. Founded in 1988 and with £450 million under management, the firm specialises in lower mid-market UK companies requiring equity investment of £5 million to £20 million.

Complete Care is based in Shropshire and has over 600 staff. Its turnover is £22 million with pre-tax profits over £3 million.

Marc Barber

Marc Barber

Marc was editor of GrowthBusiness from 2006 to 2010. He specialised in writing about entrepreneurs, private equity and venture capital, mid-market M&A, small caps and high-growth businesses.

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