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Mid-market private equity firm Bowmark Capital has backed a £75 million management buy-out of residential care provider Healthcare Homes. The buy-out from vendor August Equity is led by chief executive Richard Clough, who has worked alongside Bowmark in some of their previous investments in the sector.

Says Clough: ‘With Bowmark’s financial support and experience in the residential healthcare sector, we will pursue our strategy of growing the business through targeted acquisitions and the extension and expansion of our existing homes.’

Bowmark is investing £35 million of equity funding for a majority stake in the East Anglia-based company, while the remainder of the consideration, £40 million, is supplied by Royal Bank of Scotland. The bank has made further funding available for bolt-on acquisitions and developments.

The management team is rolling over a portion of its sale proceeds alongside Bowmark, whose partners Kevin Grassby, Mark Salter, Ron Pearson and David Torbet managed the deal for the private equity firm.

Grassly comments: ‘[The management team has] already identified an attractive pipeline of potential acquisitions and we are excited at the prospect of working with the team to build a leading private-pay business with national coverage.’

The buy-out team includes finance director Graham Lomer and operations director David Bates. Like Clough, both previously worked at health and social care provider Care UK, an investee company of Bowmark’s.

The firm’s investment in Healthcare Homes is from its latest fund, Bowmark Capital Partners IV, which closed in January with £265 million under management.

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