The support services specialist Mitie has spent £110.8m buying one of Britain's biggest home-care businesses, Enara.
The Mitie chief executive, Ruby McGregor Smith, said the purchase would help it to benefit from the UK's ageing population and cost pressures forcing a shift from hospitals and residential care homes towards greater care in the community.
Enara employs 6,000 carers, who visit elderly people to help them dress, wash and get in and out of bed, as well as providing respite care. Headquartered in Woking, Surrey, it is Britain's fourth-largest home care services group.
Mitie bought the business from the private equity house August. Ms McGregor-Smith right, said: "This provides a platform to increase our healthcare offering in the UK. Care is a growth market and the ageing population and budgetary pressure from local authorities indicates that more support will be needed.
"The care market is very fragmented but it is growing and the community care market is a huge opportunity for us."
Enara earns its revenues, which in the current year to April are expected to hit £93m, from local authorities, the NHS and direct from private customers. The domiciliary care market is worth about £8bn, according to the healthcare analyst Laing & Buisson.
Mitie said it had set up a health advisory board – including Enara's managing director – "to develop the strategic direction of its healthcare offering". The acquisition was funded by new bridge debt facilities of £150m. Mitie is trying to boost its share of contracts running public services, including bidding to operate nine jails in a joint partnership with the Prison Service.
Andrew Gibb, an analyst at Investec, said he liked the rationale behind the Enara deal. "While initial focus will be on integration and organic growth within domiciliary care, longer term, there is scope to expand into the nascent community care market," he added. "These markets combined could offer significant growth opportunities."
Mitie's name stands for Management Incentive Through Investment Equity. It originally focused on taking stakes in start-up businesses.Reuse content