Care centre group Centric secures €50m in funding

Centric Health, which owns primary care centres and GP practices across the country, has secured a long-term funding deal of more than €50 million, following an investment in the group earlier this year by merchant bank Rothschild.

The group founded by doctors Maurice Cox and Ray Power has secured the funding from a consortium of banks arranged by Ulster Bank and Bain Capital, the private equity group co-founded by soon-to-be-US senator Mitt Romney.

Rothschild invested in Centric, which previously was a co-investor with VHI in the Swiftcare clinics network, in January via its Five Arrows investment fund. Its existing investors comprised members of its management and board, as well as a family trust from Australia and the family of the late James Osborne, the former Ryanair director and lawyer who passed away last year.

The latest transaction effectively refinances the deal through which Rothschild took its stake in the Irish company, and also provides cash for acquisitions and for Centric to develop new services to roll out in its network of primary care centres.

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Refinancing

The funding is split into three tranches, including a term loan facility of €25.5 million, which may be linked to the refinancing of the January transaction. There is also a separate €20.4 million loan that appears to be earmarked for “acquisition/capex”, or capital expenditure, according to company documents.

The banking consortium has put up a further revolving credit facility of €5 million, and a third, unquantified, term loan.

Company documents stipulate that some of the proceeds of the cash be used to repay funds owed to Rothschild and “permitted acquisitions”.

Mr Cox told The Irish Times last night he was "delighted to have a new, long-term facility" in place for the group.

Significant investment

“This funding will allow us to make significant investment into our primary care practices specifically into our IT infrastructure, practice premises and investment in the development of new services that can be delivered in a primary care setting,” he said.

“Like many doctors, Ray and I have always believed in the untapped potential of primary care to improve healthcare across the entire system and this funding will support us on that journey.”

Centric operates from more than 40 locations across the State, while it also has operations in the United Kingdom. In addition, the group operates a medical recruitment business and staffing agency, Locumotion, and a diagnostic scanning division.

Last year, it sold its remaining 50 per cent stake in Swiftcare to the VHI. In the year to the end of June 2016, the most recent period for which accounts are available, the Centric group had sales of €43 million.