Trio of Irish tycoons could net windfall of £2.5bn

Owners of Barchester Healthcare have mandated JP Morgan to assess their options

Irish businessman Dermot Desmond is among the owners of Barchester Healthcare. Photograph: Cyril Byrne

Irish businessman Dermot Desmond is among the owners of Barchester Healthcare. Photograph: Cyril Byrne

 

Irish businessmen Dermot Desmond, JP McManus and John Magnier could be in for a major windfall as one of Britain’s biggest care home groups is to be put up for sale in a deal that could net its owners north of £2.5 billion (€2.8 billion).

Sources confirmed a Press Association report yesterday that the owners of Barchester Healthcare – including Mr Desmond, Mr McManus and Mr Magnier – have mandated investment bank JP Morgan to assess their options, the most likely of which is a sale.

The businessmen own Barchester through their investment vehicle Grove Investments, and a formal sale process could be kicked off within weeks.

It is thought that several buyers have already expressed an interest, but only offers higher than £2.5 billion are being taken seriously.

Mr McManus and Mr Magnier are close associates and have been involved in a number of ventures together, including ownership of a stake in Manchester United which they sold in 2005.

Both are best known here for their involvement in horseracing. Mr Magnier is one of the partners behind global breeding outfit, Coolmore Stud, and Mr McManus for his ownership of national hunt stars such as Istabraq.

Bumper payday

Barchester boasts over 200 care homes that house 11,000 elderly people and employ 17,000 staff.

Latest accounts filed with Companies House show that Barchester’s turnover increased 5.3 per cent to £563.9 million in 2016, with operating profit coming in 5.6 per cent higher at £163.3 million.

The Irish trio first invested in Barchester in 1994, a year after the company was set up by Mike Parsons, and are in line for a bumper payday if a deal goes ahead.

Its attraction to a potential buyer, likely to be a private equity firm, is the fact that Barchester’s primary focus is on privately-paying residents.

This means it is less beholden to local authority funding, which has plummeted in recent years, piling pressure on the wider sector.

Barchester paid off a £900 million debt five years ago through the sale and leaseback of 200 British care homes to a property investment business, Ravenshill International, which was backed by private investors.

– Additional reporting PA