Reverse takeover for social care rivals
Cambian has agreed to a takeover from its smaller rival Caretech, despite the company’s board favouring its remaining as an independent company.
Caretech reached a deal to acquire Cambian at a value reduced from the initial 220p cash and shares approach.
Farouq Sheikh, executive chairman of Caretech, said it has lowered the offer after completing due diligence on Cambian and taking a more ‘conservative view’ of its prospects.
Cambian was founded in 2004 and is the country’s largest provider of specialist education and behavioural health services for children, providing services to almost 2000 children in 222 locations. It works with most Local authorities in England and Wales and employs around 4500 people. The company sold its adult service businesses for £379m at the end of 2016 following profit warnings and a slump in the share price.
Caretech was founded in 1993 and provides social care to children and adults in 292 specialist services.
The deal would create Britain’s second largest remaining domestically listed operator.
Caretech believes the social care sector is benefitting from increased public outsourcing of services, growing demand for specialist care and shortage of supply . It also believe it will benefit from plans to boost NHS spending and is better protected from budgetary pressure than other social care areas.
The deal, which is subject to shareholder approval, is expected to complete in the fourth quarter of this year.