Westminster Health Care, one of the largest providers of long-term care facilities in the UK, announced yesterday that it is jointly buying Peverel, a private sheltered housing manager, for pounds 45.8m.
The deal, with Holiday Retirement Corporation, a US firm offering similar services, involves both organisations paying pounds 6.5m each in cash. The balance will be met by a pounds 32.5m loan from Bank of Scotland,
Westminster's new joint venture comes as the insurance industry positions itself for a massive pounds 5bn a year boom in sales of long-term care insurance in the wake of new government initiatives.
The Chancellor, Kenneth Clarke, is believed to be ready to announce in the Budget next week that he is to scrap means tests for elderly people who need long-term care but still have assets of more than pounds 8,000.
In return, elderly people would be expected to take out insurance cover to fund the first three years of their care, whether residential or in their own homes.
Industry estimates suggest the market for policies could grow from 15,000 sold each year to more than 500,000 by the end of the decade.
Earlier proposals to give tax breaks for taking out cover are thought to have been abandoned by ministers after warnings that such a measure might be seen as helping only the already well-off.
Companies such as Peverel, which manages almost 500 sheltered housing developments with 21,000 flats, are also expected to gain from the anticipated growth in the numbers of elderly people in Britain. It owns the freehold of about 15,000 flats.
Peverel also operates a leading "round the clock" emergency call response system known as Careline. The system is already installed in 300 of the managed developments, and Westminster Health Care hopes to expand it within other sectors of the market.
Pat Carter, chief executive of WHC, said: "We are delighted to be able to acquire a 50 per cent share of the leading retirement management company in the UK".Reuse content