Sovereign Capital completes £22 million acquisition of Alkare - third investment from new fund

Sovereign Capital Partners LLP ("Sovereign Capital"), the independent lower mid-market UK private equity provider, has completed the £22m acquisition of Alkare, the specialist provider of residential care for adults with mental health needs.

Alkare has established a strong reputation for innovation within the sector through initiatives such as the introduction of nurse-led therapy centres which enable clients to make the transition from hospital with nursing support into more independent living within the community.

Alkare provides services for over 50 clients in and around Swansea. The group employs over 120 staff who provide a range of therapies and support to help clients with complex needs associated with mental illness.

Sovereign has supplied funds to support the acquisition and to finance the strategy to grow the business through the roll-out of further homes and therapy centres as well as the development of complementary services.

The Group will be managed by a first-rate management team led by Eric Millard, former Managing Director of Florence Nightingale Hospitals and who has been previously backed by Sovereign Capital.

This is the sixth investment Sovereign Capital has made in the health and social care sector in the last two years consolidating the firm's position as the leading UK private equity investor in this sector*. Recent investments include the £12m bolt-on acquisitions of Tregynon Hall and Aran Hall for portfolio company, The SENAD Group, which provides care and education for children and young adults with special educational needs. Other sector investments include the £12.5m institutional buy-out of Orchard End Group and the £15m BIMBO of Truecare, both specialist care homes providers for adults with mental health needs and permanent learning disabilities.

Dominic Dalli, Sovereign Capital commented:

"Alkare has established a first-class reputation in this sector. Alkare's combination of long-term residential care and nurse-led therapy centres meets the needs of clients and makes Alkare a unique provider in the sector. Sovereign knows the sector well and our financial commitment and contact base will help support the roll-out of Alkare."

Eric Millard, commented:

"Alkare is an outstanding care group providing services that were positively highlighted in the recent Mental Health Bill. I am delighted to be leading the business into its new phase of growth and to build upon the success it has achieved to date."

Alkare was acquired from private shareholders who were advised by Gambit Corporate Finance. Debt for the transaction was structured by Martin Cordey of Lloyds TSB Acquisition Finance, Birmingham. Dominic Dalli, Jose Rodriguez and Andrew Hayden of Sovereign Capital led the transaction. Dominic and Andrew join the Alkare board.