Macquarie Infrastructure and Real Assets (MIRA) is understood to be in exclusive negotiations to acquire the UK nursing home chain Barchester Healthcare, although completion of the sale is expected to be delayed due to brexit and economic uncertainty.
The London-headquartered fund manager, which is being advised by Gleacher Shacklock, is believed to have submitted final bids just before Christmas for the London-headquartered business and has since entered exclusive talks.
European private equity firm PAI Partners and US investor Columbia Pacific Advisors, advised by BAML, also submitted final bids, according to a report published on Friday (15 February) by sister title Mergermarket.
Barchester owns 200 care homes across the UK, employs 17,000 staff and supports some 11,000 elderly people.
Brookfield’s infrastructure fund management arm submitted a first round bid, which were due on 25 October 2018, but did not proceed to the second round, sources told Mergermarket. Centerbridge and Carlyle, as well as Chinese investors Fosun and Cindat submitted indicative bids in September, which were accepted.
Sources expect the manager to pay slightly over GBP 2bn for all shares in Barchester, 10 times the company’s 2018 GBP 200m EBITDA.
The sale by Barchester’s owners – entrepreneurs Dermot Desmond, John Magnier, Derrick Smith and John Patrick McManus – faces several uncertainties, however, not least the threat of delays caused by Brexit and wider European economic turmoil.
“Due to market conditions, it will take longer to complete than a comparable deal five years ago would have done,” a source close to the deal said.
Bidders have also struggled to finance the deal, with potential lenders troubled by stalled transactions in the sector and current market conditions in the UK, according to a 23 January report by sister publication Debtwire. The investors were looking for around GBP 1.2bn in debt, six times leverage, the report said.
Macquarie has been a long-term investor in care homes. Last December, Macquarie Principal Finance, the investment arm of Macquarie Bank, sold its stake along with private equity investor Montreux Healthcare Fund in The Regard Group, the UK’s fourth largest specialist care provider.
MIRA is also a shareholder in Oceania Healthcare, New Zealand’s third-largest residential aged care provider and sixth largest retirement village operator.