£5 Million – Management Buyout of Care Home Business

£5 million mortgage buyout of care home business in Hereford, Warrington and Surrey

The Story

Fox Davidson were approached by a client that had a marvellous opportunity to purchase the care home business they manage from its current ownership structure.

The homes are located across Surrey, Warrington, and Hereford and the debt requirement was £5 million.

The Challenge

Any care home finance deal is difficult due to the sensitive nature of the business, and this was no different.

With the current owners’ funders offering debt forgiveness, many high street lenders were not interested.

The CQC rating of one of the care homes ‘required improvement’ and there were some further wrinkles, of course. 

The challenge was to find a lender to look at the management team and look at the positive changes they had made since they came into the business, rather than focusing on the history of the business. 

The Solution

The solution was to be found with a challenger bank, a lender that did not have tick boxes but instead took the decision to lend to a credit committee that looked at the merits of each deal.

Fox Davidson spent a lot of time working through the accounts, the CQC reports, and dealt with and overcame any issues that presented themselves.

The debt forgiveness offered to the current owners was not an issue as it was not debt forgiveness to our clients.

After several months of hard work from all involved, the finance was sanctioned and a loan of £5 million was approved.

The funding allowed the management buy-out to take place and the business will now look to expand with the build of several new care homes over the coming years.

Fox Davidson

Fox Davidson is an award-winning team of property finance consultants. To discuss your property funding requirements, please email enquiry@foxdavidson.co.uk or call us on 0117 989 7950.

Wesley Davidson

Director & Property Finance Consultant

About: Wesley has been in the industry for 20 years and has a wealth of knowledge in all areas of property finance. His real passion is working with property developers on the funding of development sites. His work ethos is to constantly gain more knowledge in order to better himself and offer more to clients and to be contactable at all times, this sets him apart from his peers.

Favourite Film: Last of the Mohicans

Quote: “In complete darkness we are all the same, it is only our knowledge and wisdom that separates us. Don’t let your eyes deceive you.” – Fat Controller