Member Article

Saga exits publicly-funded care market with latest disposal

Insurance group Saga has confirmed the disposal of Allied Healthcare, the UK’s largest domiciliary care business in a deal worth up to £19m.

The Folkestone company, which specialises in insurance for the over-50s market, has sold the subsidiary to pan-European mid-market investor, Aurelius Group.

Saga announced at the start of the year that it planned to exit the market for publicly funded care by selling Allied Healthcare because of tightened local authority budgets. The insurance group make a one-off £10m contribution to Allied Healthcare’s pension fund as part of the deal.

Funding to support the deal has been provided by Royal Bank of Scotland’s Asset Based Lending team with a £20million working capital facility. The working capital facility has helped to support the completion of the acquisition and provide working capital to support the integration and future plans for the business post acquisition.

Allied Healthcare is the UK’s largest provider of domiciliary care and has over 12,000 employees and in 2014 reported revenues of £282m.

Dirk Markus, chief executive of Aurelius Group said: “As a non-core asset of Saga, Allied Healthcare is a special situation investment that meets the Aurelius investment criteria on many levels.

“Aurelius regards the acquisition of Allied Healthcare as an opportunity to further grow and develop the company’s market leading position in the visiting care market - a critical service that supports the community care sector.

“Allied Healthcare is a mature business with strong fundamentals; it has suffered from a number of legacy operational inefficiencies but we are confident that these can be streamlined.”

Tristan Nagler, Managing Director of Aurelius in the UK, added: “The enormous pressures facing vital UK care service providers like Allied Healthcare as a result of cuts to local authority funding and the impending introduction of the national living wage are well known.

“Aurelius’ operationally engaged approach means it is well positioned to give Allied Healthcare the actively managed operational backing required to weather these challenges and ultimately build a strong and sustainable business in a sector that continues to grow year on year.

“The facility provided by Royal Bank of Scotland has played a key role in providing the required working capital to complete the acquisition in a timely fashion and support our plans for growth.”

This was posted in Bdaily's Members' News section by Ellen Forster .