A portfolio of two dozen care homes that were at the centre of a legal battle involving the financier Guy Hands is on the brink of being sold for £160m.
Sky News has learnt that the 24 sites, which are owned by Mr Hands’ Terra Firma Capital Partners, are close to being acquired by Barchester Healthcare, one of Britain’s biggest care home operators.
A deal, which has been in the works for several months, could be signed within days, according to insiders.
If confirmed, a transaction will add the homes to Barchester’s 200-strong estate, which collectively employ about 17,000 people and look after 11,000 residents.
Barchester itself was in the process of being sold earlier this year for up to £2.5bn to the Australian investor Macquarie before the deal fell over amid concerns about the impact of a potential no-deal Brexit.
The business is currently owned by Dermot Desmond, JP McManus and John Magnier, a trio of wealthy Irish businessmen who have historically been prolific investors in companies including Manchester United FC.
Barchester’s takeover of the 24 care homes owned by Terra Firma, which largely trade under the name Brighterkind, will add a further 1500 mainly privately funded residents to its portfolio.
For Mr Hands, the disposal will represent a successful exit from a sector which has caused him significant financial difficulties in recent years.
Terra Firma paid £825m for Four Seasons Health Care (FSHC) in 2012, but saw it become engulfed in financial difficulties and then beset by an aggressive fight with its biggest lender, H/2 Capital Partners.
The parent company of FSHC, which is the UK’s second-largest care home operator, was placed into administration in April, and a series of negotiations with H/2 and other potential buyers have so far failed to result in a sale.
The 24 homes now being sold by Mr Hands’ firm to Barchester, which have a series of management and service arrangements with FSHC, were acquired about five years ago.
A legal battle over their ownership ended last year with Terra Firma winning a ruling that it should retain control of the sites.
Mr Hands’ potential deal with Barchester follows separate talks between Terra Firma and Patron Capital Partners about a deal during the summer.
The portfolio of homes being sold is not connected to Four Seasons’ insolvency, although, confusingly, a number of sites included in the administration process are also branded Brighterkind.
The standalone Brighterkind portfolio, which is chaired by the former J Sainsbury chief executive Justin King, is profitable, and largely consists of more lucrative self-funded residents.
A sale of the portfolio will come as Mr Hands tries to refocus the private equity firm he set up in the 1990s to raise money for individual deals.
The Guernsey-based tycoon has just completed the sale of Wyevale Garden Centres, and is now exploring a range of new investments, many of which are in mainland Europe.
Mr Hands is arguably best-known for his ill-fated ownership of EMI, the music group, which ended up in a further set of legal disputes that he eventually walked away from.
Some of his transactions have, nevertheless, proved to be extraordinarily lucrative.
Terra Firma and Barchester declined to comment on Thursday.
Source: Business News – Markets reports and financial news from Sky