This week we look at homecare companies which have been held longer than the usual private equity cycle (some by a large margin) and ask: which are most likely to sell?
Two companies on our list, German Gesundheits (GHD) and City & County Healthcare in the UK, tried and failed to sell in 2019. According to sources HBI spoke to this summer, Gesundheits has some work to do before a buyer seals the deal.
City & County Healthcare, we were told, may have failed to sell due to a disagreement on pricing. According to our source, backer Graphite Capital was likely asking for a multiple of 10x but investors may have been unwilling to take a risk on the UK market where other homecare companies “have been decimated.” Think Allied Healthcare at the end of 2018.
But GHD’s problems could be overcome in time for a sale in 2020 and City & County could be back on the market now that the UK elections are over. We assess an 85% likelihood of a sale for both companies based on this in the HBI Deals Pipeline.
When HBI interviewed Healthcare at Home CEO Darryn Gibson at its London HQ, he didn’t deny the possibility of a sale in the next year – Vitruvian Partners bought a majority in 2012 and the investment will be entering its eighth year this February. The lengthiest investments in this space, however, are held by Procuritas and Lyceum Capital, who’ve backed Swedish Team Olivia and the UK’s Carewatch respectively since 2008.
We think the least likely to sell is TVM Capital Healthcare Partner’s Manzil Healthcare. The company is on the cusp of an expansion into South East Asia, which is a pillar of TVM’s strategy – it plans to tap into the region’s opportunities with an “international investment platform”.We would welcome your thoughts on this story. Email your views to Anaïs Charles or call 0207 183 3779.