Merger creates biggest home care group
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Your support makes all the difference.The consolidation of the nursing home industry took a big step forward yesterday after Takare and Court Cavendish, two of the biggest players, unveiled a pounds 254m agreed merger which would create the UK's biggest care home group. With nearly 12,000 beds, the new business, to be called TC Group, will be double the size of Westminster Health Care, currently the largest operator. The move comes just over a fortnight after Takare announced it was abandoning its strategy of expanding by building new homes in favour of acquisitions. Even so, the combined group will command less than 5 per cent of the highly fragmented private nursing home market, and industry observers said yesterday they expected the deal to trigger further takeovers and mergers.
The link-up was generally well received and shares in Court Cavendish rose 19p to 235p, just short of the merger terms. Takare is offering 157 shares for every 100 in Court Cavendish, valuing the latter at just over 236p each, with Takare up 2p to 150.5p yesterday.
Keith Bradshaw, Takare's chairman, who will take on the same role in the enlarged group, said the merger grew out of Takare's strategic review of the business started six months ago. They quickly realised that Court Cavendish was pursuing exactly the strategy they were looking for and when talks began five weeks ago "in less than half an hour we had more or less plotted the way forward".
"We have got the design and they have the production skills," claimed Chai Patel, chairman of Court Cavendish, who is to become TC chief executive. The merger is expected to be earnings enhancing from next year, raising occupancy of homes, fee rates and margins.
Adding on services traditionally supplied by local authorities and district nurses, such as meals on wheels and home care, where Court Cavendish has long experience, would be easier from Takare's modular nursing homes, Mr Bradshaw suggested.
Paul Saper of Laing & Buisson, a health care consultancy, said Court Cavendish would be in the driving seat and success would depend on how quickly they could deliver new products into the homes.
The merger is being seen as complementary both in terms of geography and market position. Takare's 8,550 beds in 63 homes are mostly based in the north and east of England, while Court Cavendish has 3,192 in 63 homes, predominantly in the southern part of the country and is well represented within the M25.
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