Life Style Care ready to sell as investors hunger for homes

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The Independent Online

Investment bank NM Rothschild has been hired to auction Life Style Care, a privately held nursing-home operator with 23 sites in London and the Southeast, for up to £150m.

The bank sent out information memoranda last week to prospective bidders, including Barchester Healthcare - the private group backed by Irish tycoons Dermot Desmond, JP McManus and John Magnier - and Three Delta, the investment firm set up earlier this year by Paul Taylor with the backing of the Qatar government.

"We're interested. We will bid on it," said Mr Taylor of Three Delta, owner of Four Seasons Healthcare.

Southern Cross Healthcare, which buyout firm Blackstone Group floated earlier this year, and Bupa are also likely to bid, sources said. First-round bids are due on Friday.

The auction is the latest in a string of nursing-home sales as property and private equity investors show an insatiable appetite for the sector.

The care-home business is expected to show strong growth due to the ageing population and an increased government emphasis on moving elderly patients from acute care centres to smaller homes.

"The Government is investing a lot of money in healthcare, and that coupled with a Labour administration that has shown itself as very willing to engage with the private sector, is unprecedented. Healthcare has benefited greatly," said a banker in the sector.

The sale of Life Style is understood to include both the operating company and its property portfolio.

The company runs 23 homes, with 1,737 beds, for frail and mentally ill elderly people and the younger disabled. The group earnt £1.57m in pre-tax profits on a £41m turnover in 2005, according to data from Laing & Buisson, a research firm.

This auction kicks off amid a flurry of activity in the sector. Since the beginning of December, Bupa has paid £88m for care- home operator Clinovia, Bridgepoint Capital has sold Attendo, a care-home group in Sweden, and Isotron has agreed to a £180m takeover by rival medical equipment steriliser Synergy.

Life Style, based in London, was founded in 1998 by managing director Ramesh Sachdev.