Charterhouse buys elderly care company for £514m

The UK buyout firm’s acquisition at around 14 times EBITA provided an exit for Bridgepoint, which achieved a two and a half times return over two and a half years.

Charterhouse Capital Partners has bought Tunstall Group, which provides emergency alarms for the elderly, from Bridgepoint for £514 million (€669 million; $1 billion).

Bridgepoint made a 2.5 times return and is reinvesting to take an 18 percent stake, according to a source close to the company.  Tunstall provides an emergency alarm service to 2.5 million elderly people worldwide. Bridgepoint acquired Tunstall in June 2005 in a £225 million buyout. It subsequently merged the telecare division of portfolio company Attendo with Tunstall.

Tunstall provides care systems for private homes as well as care homes and the software used by monitoring centres to respond to the alarms.

Tunstall has an EBITA of around £40 million. Charterhouse’s deal was financed by UK bank RBS with loans of around 6.5 times EBITA, according to a separate source close to Charterhouse.

The source said: “Nothing is easy in this market but this is the right company in a defensive sector with a high level of repeat income. If you’re buying a business that doesn’t have growth in today’s market it’s very difficult to get a deal done. But this is a sector with 20 percent EBITA growth [year on year].” The deal at around 14 times EBITA was a full but fair price for a growth company, he said.

Goldman Sachs, Clifford Chance, KPMG and consultancy LEK advised Bridgepoint.