Private equity firm acquires Four Seasons Health Care

Four Seasons, the leading independent provider of health and social care in the UK has announced that private equity firm, Terra Firma has agreed to acquire the company.

Four Seasons operates 445 care homes and 61 hospitals and specialist units in the UK, Isle of Man and Jersey. It employs more than 30,000 staff caring for more than 20,000 residents.

The transaction is expected to complete on or before 16 July 2012 at which point the existing debt liabilities of Four Seasons will be discharged in full.

Four Seasons is being acquired for a total consideration of up to £825 million. This will be financed through a mixture of equity and new debt, with the debt being arranged by Goldman Sachs and Barclays.

Commenting on today’s announcement, Guy Hands, chairman and chief investment officer of Terra Firma, said: “By investing new equity, Four Seasons’ debt has been very substantially reduced and Terra Firma has brought stability to the company.

“Terra Firma is committed to further investment in the business in order to achieve long-term sustainable growth. Our number one priority is to ensure that Four Seasons delivers consistent high-quality care and peace of mind for residents, service users and their families.

“Four Seasons, with a stable capital structure and clear ownership, will be able to lead the sector in terms of quality of service. I am also delighted to welcome RBS as equity partners and to have their continued support for the business.”

Geoff Westmore, chairman of Four Seasons, said: “This transaction is a great result for all our stakeholders, including our residents and their families, care commissioners and our dedicated caring staff as well as our lenders and shareholders.

“Our current lenders will be repaid in full and going forward the company will have a substantially lower amount of debt and a stable and secure financial structure. This will enable Four Seasons to continue doing what it does so well, which is provide first class care to our residents and reassurance to their families.

“I have been impressed with Terra Firma’s enthusiasm for the business and their commitment to the company’s future and to maintain our high standards of quality. I welcome them as the new custodians of a great company.”

John Davison, head of RBS Strategic Investments Group, said: “We are delighted that we have secured a long term sustainable capital structure for Four Seasons and to be reinvesting alongside Terra Firma.

“By significantly reducing the current debt, the management team of Four Seasons can continue to concentrate on delivering the high quality care and service for which they are rightly so well regarded. This is great news for residents, employees and investors alike.”

Four Seasons was advised by Rothschild, Gleacher Shacklock and Deutsche Bank. Four Seasons’ legal advisers were Macfarlanes. Terra Firma was advised by Barclays and Goldman Sachs. Terra Firma’s legal advisers were Slaughter and May.