Lots of window shoppers, but no one at the tills
There are lots of prospective shoppers in the UK care home market at the moment. But no one has yet gone through the tills.
Care UK has been having discussions with a variety of buyers, and we have provided readers with regular updates. Meanwhile, as subscribers can read in more depth, private equity was sniffing around Barchester a while ago, while HC-One is also being touted for sale.
Despite all this activity, nothing has sold. If you listen to evangelists like Sanjeev Kanoria from Advinia, he will tell you that there is money to be made in the UK market.
But the majority of players we have talked to over the last few years paint a somewhat different picture – with the right public / private mix there’s money to be made, but if the balance tips too much towards the former then the company slides into the red and you only have to look at the experiences of Southern Cross to see how badly that can end.
So is this a good, or a bad market? You have to question why some of the larger international players appear to be showing no interest in the UK which might otherwise be expected to attract the likes of an Orpea or a Korean. For them, the grass certainly seems greener on their side of La Manche.
Care UK has certainly been attracting interest, there may be a desire to split its portfolio and break up what is currently a unified business. Barchester, meanwhile, attracted interest but that petered out.
The usual kinds of names are mentioned when businesses like these come onto the market – but if investors have taken a look at the likes of these businesses – or others – they haven’t seen enough to persuade them to take the plunge yet.
And the dreaded Brexit must also be playing its part here too, cooling the market down. Whither European staff, currently relied on to keep so many care homes running, come March 2019?
We would welcome your thoughts on this story. Email your views to David Farbrother or call 0207 183 3779.