It was revealed yesterday that wheelchair and community equipment services provider, NRS Healthcare, has been bought out by a private equity firm.
The investor behind the acquisition, Graphite Capital, confirmed it has completed a secondary buy-out but declined to disclose how much it bought the £165m turnover company for.
Graphite Capital claims to be an experienced investor in mid-sized UK businesses and it is backed by investors including pension funds, insurance companies and endowment funds. The firm says most of its investments have been sold at more than twice cost.
But what does the takeover mean for NRS and its fortunes and how well suited is the investor to the challenges of the healthcare market?
Graphite Capital has a portfolio covering a range of sectors, including health, care and orthopaedic devices, but NRS is its first foray specifically into mobility and assistive technology.
The private equity firm’s healthcare strategy revolves around encouraging businesses to place a strong service offering at the heart of their work and developing efficient operating models so companies can increase market share quickly.
Graphite Capital notes that there is still a large amount of debate on the role of the private sector in the provision of publicly funded healthcare.
It says: “We strongly believe that businesses providing a higher quality service at a lower cost than the public sector can provide for itself will continue to succeed.”
Healthcare is one of Graphite Capital’s stronger sectors, it says, and its current portfolio includes care home groups like Optimum Care, Ridgmont Care Homes and Willowbrook, and a handful of other firms, including domiciliary care businesses and medical device manufacturers.
In the care sector, Graphite, which has twice won the ‘Health Investor of the Year’ award, says its realised investments have generated a return of 2.5x times cost, with no investment returning less than 1.6x cost.
Investments include Denplan (generated a return of 8x cost), Caremark (7.9x), Ridgmont (6.4x), Summit Medical (3.2x), Alliance Medical (3.1x), Minstercare (2.4x) and Willowbrook (2.2x).
It is currently expanding City & County Healthcare, which is a UK independent home care provider, and has recently backed Random42, a specialist in digital animation for the pharmaceutical and biotech industries.
NRS Healthcare, which has 20 depots around the UK to support a number of local authority contracts, received a £24m cash injection in 2013 from private equity house LDC as part of a management buyout.
The following year, LDC sold part of its stake to H2 Equity Partners, which then sold the firm to Graphite Partners.