Park Place Corporate Finance

Independent advice for the independently minded

Covenant Healthcare

£170m Secondary Management Buy-Out

Covenant Healthcare

Covenant Healthcare comprised three separate businesses - Transform, the UK's leading provider of cosmetic surgery treatments; Churchill, a developer and operater of psychiatric hospitals; and Abbey, a small group of private hospitals.

These businesses were put together under common ownership during the period 2001 to 2003, backed by Phoenix Private Equity. The growth of the business, and particularly of Transform, led Phoenix to seek an exit from the business in early 2005.

It was clear that a secondary MBO would be the most likely exit route. PPCF acted as advisor to the management team, advising on the selection of an appropriate equity partner and on structuring the deal. The new deal was financed by a combination of Electra Partners and HBOS. Management extracted a significant level of cash from the transaction and rolled over equity into the new vehicle in order to take a substantial minority stake alongside Electra.

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