Cen­tric Health se­cures €50m in long-term fund­ing

The Irish Times - Business - - BUSINESS NEWS - MARK PAUL Busi­ness Af­fairs Cor­re­spon­dent

Cen­tric Health, which owns pri­mary care cen­tres and GP prac­tices across the coun­try, has se­cured a long-term fund­ing deal of more than €50 mil­lion, fol­low­ing an in­vest­ment in the group ear­lier this year by mer­chant bank Roth­schild.

The group founded by doc­tors Mau­rice Cox and Ray Power has se­cured the fund­ing from a con­sor­tium of banks ar­ranged by Ul­ster Bank and Bain Cap­i­tal, the pri­vate eq­uity group co-founded by soon-to-be-US sen­a­tor Mitt Rom­ney.

Roth­schild in­vested in Cen­tric, which pre­vi­ously was a co-in­vestor with VHI in the Swift­care clin­ics net­work, in Jan­uary via its Five Ar­rows in­vest­ment fund. Its ex­ist­ing in­vestors com­prised mem­bers of its man­age­ment and board, as well as a fam­ily trust from Aus­tralia and the fam­ily of the late James Os­borne, the for­mer Ryanair direc­tor and lawyer who passed away last year.

The lat­est trans­ac­tion ef­fec­tively re­fi­nances the deal through which Roth­schild took its stake in the Ir­ish com­pany, and also pro­vides cash for ac­qui­si­tions and for Cen­tric to de­velop new ser­vices to roll out in its net­work of pri­mary care cen­tres.

Re­fi­nanc­ing

The fund­ing is split into three tranches, in­clud­ing a term loan fa­cil­ity of €25.5 mil­lion, which may be linked to the re­fi­nanc­ing of the Jan­uary trans­ac­tion. There is also a sep­a­rate €20.4 mil­lion loan that ap­pears to be ear­marked for “ac­qui­si­tion/capex”, or cap­i­tal ex­pen­di­ture, ac­cord­ing to com­pany doc­u­ments.

The bank­ing con­sor­tium has put up a fur­ther re­volv­ing credit fa­cil­ity of €5 mil­lion, and a third, un­quan­ti­fied, term loan. Com­pany doc­u­ments stip­u­late that some of the pro­ceeds of the cash be used to re­pay funds owed to Roth­schild and “per­mit­ted ac­qui­si­tions”.

Long-term fa­cil­ity

Mr Cox told The Ir­ish Times last night he was “de­lighted to have a new, long-term fa­cil­ity” in place for the group.

“This fund­ing will al­low us to make sig­nif­i­cant in­vest­ment into our pri­mary care prac­tices specif­i­cally into our IT in­fra­struc­ture, prac­tice premises and in­vest­ment in the de­vel­op­ment of new ser­vices

This fund­ing will al­low us to make sig­nif­i­cant in­vest­ment into our pri­mary care prac­tices – Dr Mau­rice Cox

that can be de­liv­ered in a pri­mary care set­ting,” he said.

Cen­tric op­er­ates from more than 40 lo­ca­tions across the State, while it also has op­er­a­tions in the United King­dom. In ad­di­tion, the group op­er­ates a med­i­cal re­cruit­ment busi­ness and staffing agency, Locu­mo­tion, and a di­ag­nos­tic scan­ning di­vi­sion.

Last year, it sold its re­main­ing 50 per cent stake in Swift­care to the VHI. In the year to the end of June 2016, the most re­cent pe­riod for which ac­counts are avail­able, the Cen­tric group had sales of €43 mil­lion.

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