CareTech Acquisition

In the two years that followed flotation CareTech made rapid progress, generating strong growth in profits and earnings, each ahead by more than 80% per annum. The Group’s excellent operational track record helped to establish a reputation for CareTech as a company that over delivers. In the late spring of 2008 CareTech identified Valeo, an acquisition that had the potential to provide a platform for a fourth regional division within the UK .

Providing specialist services to people with learning difficulties from its ten mainly freehold residential homes Valeo was an ideal fit for CareTech. With 71 beds and 27 day care places Valeo had critical mass that would extend CareTech’s reach into the North of England offering the basis for a fourth division.

Although the company could finance the deal through bank debt it decided that the size of the long term opportunity made it right to seek further equity, the first since flotation. This enabled the Group to repay some bank debt and provided further headroom to finance growth.

The deal was well received by the market and £30m of new money was raised at a discount of less than 5% to the prevailing share price. This exceptional result reflected the combined strength of the company’s track record and Brewin Dolphin’s strong standing within the sector.