Guy Hands’s Terra Firma Capital Partners Ltd. agreed to buy Four Seasons Health Care, a U.K. care-home operator, for 825 million pounds ($1.34 billion), his biggest purchase since losing control of EMI Group Ltd.
Terra Firma will inject fresh equity into the company, the London-based private equity firm said in a statement today. Barclays Plc and Goldman Sachs Group Inc. will arrange about 525 million pounds of financing for the purchase, according to a person with knowledge of the situation who declined to be identified because the terms are private.
“By investing new equity, Four Seasons’s debt has been very substantially reduced,” Hands, chief investment officer of Terra Firma, said in the statement. “Terra Firma has brought stability to the company.”
Four Seasons was taken over by its lenders in 2009, three years after being bought by Qatari-backed fund Three Delta LLP. Royal Bank of Scotland Group Plc, which became Four Seasons’s largest shareholder after the debt-for-equity swap, will retain a stake, Terra Firma said today.
Hands, 52, lost almost a third of his London-based firm’s most recent 5.4 billion-euro ($7.1 billion) buyout fund after ceding control of EMI to lender Citigroup Inc. when the record label struggled to meet the terms of the loans used to finance its takeover in 2007. Hands last month agreed to buy the Garden Centre Group, which sells plants and vegetables in 129 stores throughout the U.K., for 276 million pounds.
Four Seasons operates 445 care homes and 61 hospitals and special units in the U.K., Isle of Man and Jersey. It recorded about 100 million pounds of earnings before interest, tax, depreciation and amortization in 2011, Terra Firma said.
Buyout firms are likely to drive a boom of health care deals in Europe in the next 18 months, according to an analysis by Credit Suisse Group AG. Acquisitions of European private equity-owned facilities such as hospitals and lab operators in Europe last year more than doubled from 2010 to 6.2 billion euros. Fresenius SE agreed last week to buy Rhoen-Klinikum AG for 3.1 billion euros, the biggest deal in European health-care services in more than five years.
Four Seasons was advised by Rothschild, Gleacher Shacklock and Deutsche Bank AG. Barclays and Goldman Sachs advised Terra Firma, according to the statement.