Allianz exits Four Seasons for £1.4bn

Allianz Capital Partners has sold UK care homes provider Four Seasons Healthcare to an investment fund of the Qatar Investment Authority, despite interest from 3i and Terra Firma Capital Partners.

Allianz Capital Partners, the private equity arm of Germany’s Allianz group, has sold Four Seasons Healthcare, a UK nursing homes operator, in a £1.4 billion (€2.08 billion) deal., after a lengthy auction beginning in January this year.
A source close to the auction said: “Allianz had only owned the asset for two years and had intended to hold it for longer. It began the auction because it had received a number of expressions of interest, but it was only going to sell at absolutely the right price.”
Three Delta, an investment fund of the Qatar Investment Authority, acquired Four Seasons Healthcare for approximately 14 times the company’s estimated 2006 earnings before interest, tax, depreciation and amortisation.
Dresdner Kleinwort was sole financial advisor and according to the source had looked at a number of options for the business, including selling the property and operating company separately. The winning bid has bought Four Seasons complete, although Paul Taylor, founder of Three Delta, had looked at acquiring the business’s property portfolio as part of property tycoon Vincent TchenguizConsensus team, the source said.
Allianz Capital Partners bought the care services provider from London-based Alchemy Partners for £775 million. The London-based private equity firm was reported to have reaped four times its original investment in the secondary buyout to Allianz Capital Partners in July 2004.
Three Delta reportedly beat off competition from rival private equity firms 3i and Terra Firma Capital Partners, as well as Borealis Infrastructure, a Canadian investment firm.
International law firm Freshfields Bruckhaus Deringer advised Allianz Capital Partners on the disposal. Dresdner has advised on a number of other deals in the care homes sector recently, including Netcare, a South African private hospital operator, which bought General Healthcare Group for £2.2 billion in April of this year alongside Apax Partners, London and Regional Properties and Brockton Partners, from BC Partners; HgCapital, which made its largest transaction to date with the purchase of Paragon Healthcare Group from Duke Street Capital for £322 million, also in April 2006; ISIS Equity Partners’ £30 million buyout of Care Management Group in April 2003.
Dresdner Kleinwort also advised Cinven on its re-acquisition acquisition of Partnerships in Care from General Healthcare Group in March 2005 for £552 million. Cinven had acquired General Healthcare Group from Compagnie Générale des Eaux for €998 million in 1997 before selling the business to BC Partners for £1.28 billion in September 2000.
Four Seasons Healthcare is one of the largest providers of care homes and specialist services in the UK with over 19,800 beds in 416 care homes, hospitals and centres. The business has more than 20,000 employees.
Other private equity deals in the care homes sector this year include HgCapital’s sale of Calstlebeck to Barchester Healthcare Group for £255 million in July; BC Partners and AXA Private Equity’s acquisition of Médica, a French nursing home business, from Bridgepoint for €750 million, also in July; and Graphite Capital’s buyout of Hadrian Healthcare in August.