Independent Living Group (ILG), a nursing-home operator with more than 20 sites across Hampshire, East Sussex and Kent, has begun a £100m auction.
Boutique investment bank Jamieson Corporate Finance sent out information memoranda last week to prospective bidders, including Barchester Healthcare, the country's largest private nursing-home group which is owned by Irish horse racing tycoons John Magnier and JP McManus.
Several mid-market private equity firms, including Hg Capital, have also received the data. Jamieson last week advised Hg on its £255m sale of nursing-home operator Castlebeck to a Lydian Capital Partners, an investment firm with close ties to Barchester.
ILG is comprised of Iliace Holdings and Communitas Holdings. They were bought together by businessman Mahesh Patel, who sold his previous company, Highclear Homes, to Ashbourne Healthcare for £60m in 2004. Jamieson was hired to review ILG, and offers of between £60m and £100m are predicted to come in. Jamieson declined to comment.
ILG specialises in homes for patients with learning disabilities. "The private equity community will be very interested in this because they have seen the success that others have had in the learning disability space," said one industry source.
Shares in CareTech, the only publicly traded group in this sub-sector, have gained more than a third since the beginning of the year amid frenetic deal activity across the industry. "The owner [of ILG] may be basing his expectations on the success of Caretech," said the source. Private equity buyers are attracted to nursing homes because of their steady cashflows and property portfolios.
Southern Cross Healthcare, owned by private equity firm Blackstone, successfully floated on the London Stock Exchange last week. In April, South African group Netcare led a consortium that paid £2.2bn for General Healthcare Group. German insurer Allianz is auctioning Four Seasons Healthcare, which is expected to fetch at least £1bn.
Firms likely to be interested in ILG are Isis Equity Partners, which owns Care Management Group, Sovereign Healthcare, PPM Capital, Electra Partners Europe and 3i, which owns Care Principles.
However, ILG may fit best with Barchester as bothcater for private patients. "I'd be surprised if most [mid-sized] private equity firms don't receive the information memorandum," said a sector banker.