Irish billionaire trio close in on Barchester sale to Macquarie

Australian investment bank Macquarie is in advanced talks to acquire Barchester Healthcare, the UK care homes group that was put on the market last year by Irish billionaires Dermot Desmond, JP McManus and John Magnier, The Irish Times has established.

The group, with headquarters in London, runs more than 200 care homes and seven registered hospitals, and was put up for sale last July with a price tag of £2.5 billion (€2.9 billion).

It is understood that, while the Australian banking group has emerged as the most advanced suitor, it has not yet been granted preferred bidder status, which would give it a period of exclusivity to finalise a deal. It is not clear what value the bidding process has put on the business.

US bank JP Morgan is advising the owners of Barchester, who also include Derrick Smith, part-owner of the Coolmore Stud racehorse breeding business in Co Tipperary with John Magnier, on the process.

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The Irish tycoons first invested in Barchester 25 years ago, a little over a year after it was set up by British entrepreneur Mike Parsons. The company had an average of 15,462 staff in 2017 and provided more than 12,000 beds across the UK.

Barchester sold its only Irish facility, the 117-bed Knightsbridge Care Village in Trim, Co Meath, to French-owned nursing home group CareChoice in 2017 for an estimated €20 million.

Care homes sector

Macquarie has been an active buyer and seller of investments in the care homes sector over the past decade and a half.

Last year, the group sold a 15.6 per cent stake in New Zealand aged care and retirement village operator Oceania Healthcare, reducing its interest from a majority holding to just under 42 per cent. It has been invested in the business since 2005.

Macquarie's principal finance unit and the Montreaux Healthcare Fund moved at the end of 2017 to dispose their interest in Regard, the UK's fourth-largest private organisation providing supported living and residential services for people with learning disabilities and mental health needs.

Various reports last year had suggested that parties interested in Barchester included New York-listed seniors housing property investment trusts Welltower and Vestas, as well as Seattle-based property investment firm Colombia Pacific Advisors.

Barchester, one of the UK’s four-largest long-term care providers, was also said to have attracted indicative bids from a Singaporean sovereign wealth fund, and Paris-based private-equity firm PAI Partners.