Belfast Telegraph

Troubled care home group sold for £825m

By Margaret Canning and Jamie Grierson

The owner of 73 Northern Ireland care homes with nearly 4,000 residents will be sold to a private equity firm for £825m, it was announced.

Four Seasons Health Care - the UK's largest independent elderly and specialist care provider with 445 homes around the UK - will be sold to Terra Firma, led by financier Guy Hands.

The Northern Ireland homes have 4,000 beds filled to around 91.2% capacity, while the business is the province's fifth-biggest employer with 4,461 staff.

Northern Ireland managing director Jim McCall said the purchase was "without reservation or qualification, a good news story".

The announcement follows a period of uncertainty for Four Seasons as it held refinancing talks with shareholders and potential new investors over debts of £780m.

A debt-for-equity swap in 2009 left Ulster Bank parent Royal Bank of Scotland its biggest shareholder with a 40% stake.

Mr McCall said: "We welcome the involvement of Terra Firma, which along with Royal Bank of Scotland will be equity partners in Four Seasons.

"The best possible news is that the stability, security and certainty we have not had recently, is now established.

"Terra Firma has made a huge commitment to work with the company to make sure the quality services and standards for our residents are sustained.

"The future is positive today, much more than it was on Friday."

He said there was "no indication" that Terra Firma would make any changes to management or staff numbers.

Its estate includes homes taken over from Southern Cross - formerly the UK's biggest care home operator - which went out of business last year.

Guy Hands, founder, chairman and chief investment officer at Terra Firma, said: "Our number one priority is to ensure that Four Seasons delivers consistent, high-quality care and peace of mind for residents, service users and their families."

Health Minister Edwin Poots said: "This announcement is to be welcomed, as it gives security to the residents and employees of Four Seasons' care homes."

A spokesman for the Health and Social Care Board said it welcomed the announcement, "for the clarification and reassurance it offers to residents and their families about the continuity of their care".

The deal is expected to be complete by July 16, at which point Four Seasons' debt liabilities will be discharged in full.

The £825m price tag is being financed through a mixture of equity and new debt - with the debt being arranged by Goldman Sachs and Barclays.

Four Seasons has achieved a turnaround in quality of care, business performance and is trading profitably, Terra Firma said. It owns around 60% of the facilities it operates.

A representative from a leading workers union, however, was less impressed with the move.

Paul McCarthy, GMB regional officer in Northern Ireland, said: "Since RBS took a controlling stake in Four Seasons it has essentially been state-owned.

"The 20,000 residents and their families and 30,000 staff will need urgent assurances from the Government, Guy Hands and Terra Firma for a stable future," he added.

The highs and lows of healthcare chain's trading history

1989: Four Seasons founded in Scotland by Robert Kilgour.

1999: Alchemy Partners steps in to help build the group with the acquisition of CrestaCare, a deal worth £133m.

2004: Four Seasons is sold to Allianz Capital Partners for £775m.

2006: Four Seasons is sold to Delta Commercial Property, an investment vehicle for Three Delta and backed by the Qatar Investment Authority (QIA), for £1.47bn.

2008: QIA walks away from the deal while banks who have lent money write off £800m.

2009: Financial restructuring takes place in which debt is reduced to £780m from £1.5bn via a debt-for-equity swap. Royal Bank of Scotland is the company's largest shareholder with a stake of approximately 40%.

June 2010: Four Seasons asks bondholders to extend the maturity of its £600m loan for a further two years.

April 2012: Terra Firma acquires Four Seasons, saying that by the time the deal completes in July, existing debt liabilities of Four Seasons will be discharged in full.