Graphite Capital Plugs £24 Million into Willowbrook Healthcare

Graphite Capital has invested an additional £24 million into Willowbrook Healthcare, a UK-based operator of nursing and dementia care homes for the elderly. Graphite invested an initial £53 million in Willowbrook back in November 2008.

PRESS RELEASE

Graphite Capital, the leading UK mid-market private equity specialist, has completed a further £24 million development capital package to support a major expansion programme by Willowbrook Healthcare. Willowbrook is a premium quality nursing and dementia care home group for the elderly.

The new funding takes the total commitment of Graphite funds, the management team and its banking partners to almost £80 million. In November 2008, Willowbrook raised £53 million to finance the initial development of care homes. The company is led by a highly experienced management team, headed by John Strowbridge.

Willowbrook, whose care homes operate under the Avery brand, currently has three homes, located in Sunderland, Kirkstall (Leeds) and Newcastle-under-Lyme, with a further five under development. It will use the new funding to develop and acquire additional homes which, it expects, will increase the total number of beds to over 900 in the next couple of years.

The new funding package comprises an £11 million equity commitment from Graphite’s most recent fund, Graphite Capital Partners VII, and the Willowbrook management team. The existing banking syndicate, led by Royal Bank of Scotland, is providing £13.3 million in additional debt.

Graphite has considerable expertise in the sector having successfully invested in six care home businesses in the past 16 years – two of which Optimum Care and Avery Healthcare – are, or were, operated by the same management team as Willowbrook.

Willowbrook managing director, John Strowbridge, said: “Willowbrook provides the highest quality nursing and dementia residential care in the UK and we are seeing strong client demand wherever we open a new home. The standards of care we provide for our clients are at the heart of our success. We value the long term partnership we have with Graphite which is enabling us to continue expanding across the UK.”

The transaction was led for Graphite by Mark Hall, investment director, and Mark Hudson, partner, who commented: “Demographic changes are driving the need over the medium term for additional and improved care homes for the elderly in the UK. We are delighted to be providing Willowbrook with further development capital. To raise additional debt facilities in a period of challenging capital markets is a testament to the quality of the business and its management team and to the commitment of our banking partners, led by Royal Bank of Scotland.”

Ends

For further information, please contact:

Graphite Capital: Mark Hudson/Mark Hall

020 7825 5300

Caroline Cecil Associates: Caroline Cecil

020 7610 4110

Notes to editors:

Graphite Capital is a specialist provider of private equity finance to mid-market companies in the UK. Graphite focuses on management buy-outs and buy-ins, expansion capital, replacement capital and turnaround opportunities. It invests in transactions with enterprise values of £25 million to £200 million.

Graphite manages more than £1.1 billion through three private funds and the publicly-quoted Graphite Enterprise Trust PLC. Willowbrook Healthcare was the third investment made by Graphite Capital Partners VII, which raised £555 million in May 2007. The fund’s other investments are Alexander Mann Solutions, the largest independent provider of recruitment process outsourcing solutions to blue-chip companies worldwide; Kurt Geiger, Europe’s leading luxury branded footwear retail, design and wholesale company; and PTPG, a timber building products business. Graphite’s previous fund invested in 15 companies including Dominion Gas, the independent supplier of industrial gases to the offshore industry, and Micheldever Tyre Services, the UK’s largest wholesaler of car, 4×4 and motorcycle tyres.

Graphite is highly experienced in making and successfully realising healthcare home investments throughout the various stages of the economic cycle. Apart from Willowbrook, previous investments include Avery Healthcare, which was sold to Southern Cross in 2007 for £96.5 million; Optimum Care, which has 11 homes and another two under development; Ridgmont Care Homes, which was sold to Ashbourne Healthcare in 2005 for £88 million; and Clearminster and Kingsclear – both of which achieved a successful return.

The following parties were involved in the transaction:

Royal Bank of Scotland: Paul Halliday, Sian Morgan, Jennifer Cable

Bank of Ireland: Martyn Smyth, James Griffin

Allied Irish Bank: Neil Thomson

Legal advisers to the banks: Stephenson Harwood (John Fox, Simon Collins)

Willowbrook

Legal: Pinsent Masons (Matthew Heaton, Joanne Ellis, Alexander Burton)

Graphite

Legal: Olswang (Adam Crossley, Stephen Rosen)