Country Court Care has secured investment of £40 million from Cheyne Capital Management, which will be used to finance four new build homes in Huntingdon, Northwich, Welwyn Garden City and Milton Keynes.
An additional three homes, all of which are going concerns, will be taken over as part of the deal.
All of the four new homes were selected from a development pipeline of 14 projects currently under the management of LNT Construction. The company will be retained as lead contractor on all four homes.
Homes in Huntingdon and Northwich are already under construction and will complete in May and June.
Work will start on the Welwyn Garden City and Milton Keynes properties in the summer. Both are part of larger multi-use residential developments.
Each care home will be marketed as a high end property to affluent self-funders similar to Rose Lodge, pictured above.
Al-Karim Kachra, Corporate Finance Director for Country Court Care, managed the transaction.
“Cheyne spoke to us because they were interested in the care home sector. They had just done a deal with Lifecare Residences in Battersea [a retirement village], and wanted to work with a care home company where they could have a more active lending relationship,” Mr Kachra explained.
Country Court Care is known as a specialist at acquiring struggling care homes and turning them around into profitable businesses that can finance the next acquisition.
The £40 million line of credit from Cheyne Capital Management is a game-changer, and allows the Peterborough-based group to expand rapidly into luxury new build properties.
“We typically used bank finance to acquire under-performing homes, investing in both the quality of care and the quality of the environment. By doing this we’ve been able to increase profitability and then use the improved trade to finance the next acquisition. The process is slow and involved but one which we’ve been successful in. At the same time, many operators are building spectacular new properties and we want to make sure we compete in this market,” Mr Kachra told Care Home Professional.
Country Court Care expects to have 27 care homes open by the summer of 2017, up from 21 today. Seven will have been built in the past few years, the remainder were bought and turned around by Country Court Care, but almost every home has been purpose built as a care home.