CareTech agrees deal for Cambian takeover worth up to £372m
CareTech assured the takeover would improve care quality.
Social care services firm CareTech has agreed to buy Cambian in a deal that values the takeover target at up to £372 million.
CareTech said the deal was “compelling” given the “highly complementary service offering and geographical coverage” provided by both firms.
It also said the takeover would improve care quality.
CareTech has put forward two offers, one of which is a cash-and-share deal that would pay 100 pence in cash and 0.267 in new CareTech shares per Cambian share.
The alternative would be an all-cash offer of 190p per share.
The first offer values Cambian at approximately £372 million, while the all-cash deal is worth around £354 million.
CareTech said the takeover will not mean eradicating the Cambian name, which will be kept alongside its executive team.
It also assured that there would not be any “undue disruption” nor any material change to both companies’ operating sites as a result of the transaction.
Christopher Kemball, chairman of Cambian, said: “While the Cambian board feels that the business already had a promising future as the largest independent provider of childcare, this transaction represents an attractive proposition for Cambian shareholders and broader stakeholders.
“Like Cambian, CareTech has an excellent reputation for the quality of its specialist education and behavioural health services as evidenced by CQC and Ofsted ratings ahead of sector averages.
“This should ensure that the children currently in Cambian’s care will be well cared for.”
Cambian – which is a children’s specialist education and behavioural health service provider – employs around 4,300 people across 224 residential sites, special schools and fostering offices across England and Wales.
Cambian logged a £9 million pre-tax loss in its most recent set of annual results, having narrowed from a £37.4 million loss a year earlier.
That was against an 8% rise in revenue to £196 million, which was thanks to an increase in average fee levels amid a move to “higher severity services”.
The takeover would see it come under the umbrella of CareTech, last reported as having more than 5,000 staff.
CareTech provides services for people with adult learning disabilities as well as foster care and residential services for young people.