National Healthcare Provider

Industry

Healthcare Services

Company Type

Healthcare provider, Residential, Nursing

Location

UK

Size

+/-  $100M​  Million

Investment Type

Equity
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Overview

  • Churchlake Care is a national healthcare provider, delivering outstanding care in residential, nursing and dementia care homes throughout the United Kingdom
  • Seeking +/- $ £100 million to consolidate the industry through acquisitions in order to improve economies of scale and streamline business operations
  • Current equity of $10 million in existing portfolio
  • Churchlake ensures residents are respected, nourished and supported to express themselves, taking maximum enjoyment and value from every day of their lives
  • Currently own and successfully operate ten care facilities with associated real estate in the UK – 25 facilities in the pipeline awaiting completion
  • Churchlake Care is committed to deliver peace of mind, provide residents with safety and security in a healthy environment where they can expect the same level of care and attention, they would receive from a loved one
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Opportunity

  • It is projected that 1 in 7 people will be over the age of 75 by the year 2040, meaning that demand for these services may grow significantly in coming years. This coupled with the fact that 38% of the UK’s wealth is held by the 65+ community translates to an abundance of capable customers
  • The roll up of consolidated businesses strategy alone makes the opportunity extremely powerful, given typical consolidations benefit from economies of scale and waste reduction synergies, however when combined with the two other game changing strategies almost adds rocket fuel to growth plans
  • Baby boomer demand is filling the beds and the same population demographic currently operates “Mom & pop” care home businesses (which account for 90% of services in the UK) – this creates an immediate, unique acquisition and integration opportunity for Churchlake Care
  • The big players are losing ground​: The Big 5’s share in the market has been dropping significantly going from 16% in 2014 to 13% in 2019, mainly due to ageing stock and the inability to keep up with the massive fragmentation for which this industry is well known. With main players losing ground rapidly, there is a significant opportunity is huge for numerous new players not only to enter but also to dominate a variety of verticals within this market
  • Government Support​: In recent years, the NHS has been seeking to reduce capital and has been outsourcing to private entities who can run care homes such as Virgin Care which obtained more than £1 Billion in contracts to run more than 200 NHS services. The government will support senior citizens fully or partially in covering the costs of the care home according to their financial capabilities. The British government has also supported the care sector with various financial incentives such as infections control grants and Coronavirus business interruption loan to assist throughout the pandemic
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Solution/Strategy

  • The care home market has evolved quite slowly when compared to the rapid pace of innovation that has swept the world. Churchlake Care believes the only way forward is through consolidation. The plan is to acquire multiple sites across key verticals. Churchlake expect to become the preeminent healthcare group in the UK within five years

  • People centered case: In everything that Churchlake does, the client, their needs, and well-being will always be at the center of it all. This is mirrored throughout its business and reflected with its focus on home from home care services with a family atmosphere

  • Consolidation: Around 90% of UK care homes remain in family run “Mom & Pop” hands and is clearly a fragmented industry ripe for consolidation. Advantages include centralizing HO costs, reducing waste, optimizing best practices with new IT and outsourcing finance and administration operations. All with high level corporate oversight from an extremely experienced board of directors. Retaining existing management teams and leveraging them within the group of Churchlake Care, so that it streamlines and optimizes many of its processes and strengthen core businesses

  • Game changing strategies:  Two other game changing strategies are the LLP or partnership launch and corporate restricting for VAT (Value added tax) recovery. Both strategies reduce tax burdens retrospectively and ongoing costs are reduced significantly

  • Margin of safety: Healthcare firms were historically unable to recover significant VAT expenditure until new case law evolved. The Kingscrest claim allows the group to make claims for VAT dating back to 1993 in some cases, making a huge difference to the bottom line for Churchlake’s existing operations and new acquisitions. UK Governmental change to company structure in 2001 means that an LLP Limited liability partnership pays far less in employer tax contributions and generates wider positive cultural benefits to its members and company alike

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Management

Nick Farmer

COO

 

Successful track record operating at CEO, Managing Director and NED levels in health and social care, gained over the past 26 plus years. Masters Degree level and holds various qualifications including Registered Nurse; an MBA, Masters in Professional Practice (MProf) and an MA (Management). Commercial and operations experience in private equity backed, public and charitable multi-site service sector businesses. Had financial responsibility for organizations ranging in size from £10m to £130m. Thorough understanding of the health and social environment, the NHS in the wider public sector and commissioning environment. Sector experience includes care homes for older people and mental health as well as other healthcare related services.  Significant knowledge and experience in operating services in a highly regulated environment and with Regulators on regulatory and compliance matters and developing systems to ‘turn around’ homes that are deemed as failing. Successfully led senior multi-disciplinary leadership teams and has practical experience of managing the operational challenges involved in leading and motivating teams to execute organizational development strategies.  Examples include the review and setting up of new organizations; integrating new services into existing businesses; performance improvement; acquisitions, management and integration, managing major capital projects; public sector TUPE transfers; initiating and developing new joint venture partnerships and service redesign and transformation. Managed in organisations with high value public sector healthcare contracts with a range of different stakeholder involvement.

Alan Charles Jebson

Founder and CEO

 

Proven, self-motivated entrepreneur and leader with extensive expertise in property acquisitions.  Amassed a substantial property portfolio in London from the early 1990s and conducted over 150 real estate transactions.  Specialized in housing association contracts via local government. In-depth knowledge of local government funding and a well-established network of contacts. Extensive knowledge of finance and property management. Experienced in oil and gas, IT, real estate, insurance, and the provision of health care. Understands how to enhance value through renegotiation of supplies, consolidation, waste reduction techniques, and Capex investment and an uplift in the quality of care.

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Learn More About This Transaction

CONTACT US

Hi. We're not around right now. But you can send us an email and we'll get back to you, asap.

Thanks, Ken

Ken Margolis | Managing Partner Castle Placement, LLC
1460 Broadway Street, Rte 400
New York, New York 10036
(212) 418-1188 | C: (516) 712-7784
kmargolis@castleplacement.com

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