Healthcare Business International

Kuwaiti sovereign fund buys Voyage Care

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Voyage Care, the UK’s largest provider of support for people with learning disabilities by revenue, has been acquired by Wren House Infrastructure, a London-based subsidiary of the Kuwait Investment Authority, Kuwait’s largest sovereign wealth fund. HBI explores the multiple paid, and the thinking behind it.

Wren House Infrastructure bought the company from private equity firms Partners Group and Duke Street, who have been joint owners since they bought it for €375m from PE firm HgCapital in 2014. The sale took place without a competitive tender process, and HBI understands it sold for an enterprise value of £580m (€694m) – around a 13x FY21 EBITDA multiple, and an 11x run rate EBITDA multiple. HBI understands this represents around £330m (€397m) of equity and £250m (€299m) debt. 

“A 13x EBITDA multiple/11x run rate EBITDA multiple seems reasonable,” healthcare consultant Leonid Shapiro tells us. “Whilst I would have expected a slightly higher multiple given they didn’t run a process, there are always risks to running a process and they may have just preferred a guaranteed sale rather than trying to get a higher price.”

A UK-based operator tells us: “Infra funds are all investing in specialist care. Anything involving learning difficulties or cognitive difficulties, autism etc, is attractive. For specialist care, people are generally paying low double to mid teen multiples generally.”

Voyage Care said of the deal: “The new investment will enable us to build on the progress made to date, where quality remains at the forefront of all we do, as well as achieve our continued growth aspirations,” adding “Voyage Care is well-positioned to continue consolidating the specialist care market”.

Wren House said: “This transaction represents another major step in achieving our ambitious investment strategy, providing significant further exposure to social infrastructure following our recent investment in Almaviva Santé in France and an opportunity to invest further in the UK, a key focus country for Wren House.”

Voyage Care supports 3,500 adults and children with learning disabilities, brain injuries, physical disabilities and other complex needs, and employs over 10,000 people across its 359 locations throughout the UK. The company focuses on individuals who need a high level of support throughout their lives, and provides at-home care as well as running multiple care homes. The aim is always to help supported individuals to live as independently as possible.

It had sales of £274.2m (€327m) in FY2021 and an EBITDA of £44.8m (€53.5m), making it the largest player in the UK adult care sector. The company has been growing steadily since Partners Group and Duke Street took ownership in 2014 – it has consistently had positive single digit revenue growth over the past five years. Partners Group in particular has invested in increasing the company’s scale as well as the quality of the care it provides. 

Remy Hauser, managing director at Partners Group, said: “The specialist care market remains highly fragmented in the UK, with a range of different providers catering to very specific needs. This has created growth opportunities for Voyage Care, which has acquired and carefully integrated several specialist learning and paediatrics care providers during our ownership, in addition to organically expanding its business to meet changing needs.”

In September 2017, Voyage Care acquired Focused Healthcare Ltd (FHL), a provider of specialist care to children in London.

Just over half of the €7-8bn UK adult care market is served by non-profits such as Mecap, Scope and Leonard Cheshire. The for-profit part of the sector is fragmented. Voyage Care, despite being the largest player, has only a 4-5% share of the overall market and the top five players have no more than a 15% share.

The sector has been growing at 5-6% per year, as people with severe injuries or birth defects live longer and more children with serious genetic problems are being born as a result of intermarriage in ethnic communities. 

But the sector faces major issues, in particular around staffing. As well as the Covid vaccine mandate limiting the pool of potential workers, there have been scandals such as the 2011 Winterbourne View case, the publicly-funded private hospital near Bristol that became the subject of a BBC Panorama investigation when it was found to have staff members who were abusing people with learning disabilities at the hospital. 

Voyage Care says in England, 95% of its registered care homes are rated ‘good’ or ‘outstanding’ by the independent Care Quality Commission, and that this far exceeds the market average.

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