NCB Stockbrokers is raising €30 million in equity from Irish investors for Canford Healthcare, a newly-formed British company that plans to acquire and operate 10 care homes in the south of England. Canford was co-founded by Brian Cooney, a 41-year-old Irishman who netted an estimated €7.5 million from the sale of All Water Systems in 2003 to PHS Group.
Mr Cooney and his co-founders, British executives Barry Lambert and Chris Bialan, are contributing €1 million in equity between them.
NCB is also raising €60 million in bank debt to fund Canford's ambitious expansion. It is understood that five banks have pitched to provide the company with debt, including Anglo Irish Bank and Bank of Ireland.
This will give the company a €90 million war chest for acquisitions over the next 18 months to two years. Cranford expects to operate more than 700 beds.
"Cranford is looking at buying homes that offer both the potential for expansion through new planning and the opportunity to increase charges over time," said Bobby Hassett, director of wealth management at NCB.
Mr Hassett said the company expects to achieve operating margins of 30 - 40 per cent. The fundraising has been structured as a seven-year investment, with NCB predicting a 25 per cent return per annum for backers of the project.
The minimum contribution is €150,000 and NCB expects to close the fundraising by the end of February. At the end of the seven-year term, it is expected that Canford will either be sold or listed on the stock market.
According to NCB, the UK care home market is valued at €17.8 billion. Leading players include Bupa, Southern Cross Healthcare Group and Barchester Healthcare, which is backed by John Magnier, JP McManus, Dermot Desmond and Denis Brosnan.
Canford is hoping to cash in on the growing number of older people requiring specialist healthcare in the UK. The number of people aged 85 or older in Britain has grown from 1 million in 1995 to about 1.4 million at present.
Mr Cooney is already involved in the care homes business as the owner and director of two groups in the UK, Primula Care and Alum Care.
Mr Cooney, Mr Lambert and Mr Bialan will share 20 per cent of the profits if the annual return to investors is 15-20 per cent. This rises to 25 per cent of profits if the return goes up to 22.5 per cent while the trio will share 30 per cent of Cranford's surplus if the target return of 25 per cent a year is exceeded.
