The entry of Corpfin Capital into Grupo 5, specialised in social services, has already resulted in a first corporate transaction. Grupo 5 has completed the acquisition of 100% of Geriátrico Manacor and Novaedat Picafort, thus initiating the build-up strategy that the private equity fund aims to develop in the elderly care and nursing home sector.
New growth plans
The transaction involves the acquisition of six nursing homes previously owned by the Valencian group Cleop, located in Mallorca, in the towns of Manacor, Inca, Pollença, Sant Joan, Montuïri and Can Picafort. Specifically, the six centres total 696 residential beds (private and publicly funded) and 130 day-care places, and employ nearly 450 professionals. Although the amount of the transaction has not been disclosed, it has enabled Cleop to settle a €7.6 million payment to the Tax Agency, which holds more than 9% of its shareholding as a result of a debt-for-equity swap approved to lift its insolvency proceedings.
The transferred assets represent practically half of Cleop’s geriatric business, which operates in this sector under the Novaedat brand. This division had in fact become the real backbone of the Valencian group, which had been forced to declare insolvency of its construction parent company due to the crisis.
However, its dispute with the Tax Agency, which seized the rest of Cleop’s companies in an attempt to recover the construction company’s debt, forced the group chaired by Carlos Turró to divest its Mallorca business in order to obtain liquidity. Cleop’s share capital is distributed among Participaciones Industriales y Servicios (26.3%); the Tax Agency (9.6%); Libertas 7 (7.88%); Construcciones y Estudios (3.8%); and Agro Invest (3.2%). In its 2016 annual accounts, Cleop went from reporting an operating result of €20.8 million to just €2.28 million due to extraordinary results, which fell from €16.63 million to negative €2.5 million. In its latest accounts, for the first quarter of 2017, the group reported revenues of €7.14 million, with an EBITDA of €964,000 and a net loss after taxes of €123,000. Its current workforce is around 670 employees.
Grupo 5 is a Madrid-based company specialised in mental health centres and social emergency services. Its scope of activity focuses on areas such as care for people in situations of dependency, mental illness and psychosocial rehabilitation, neurorehabilitation, social emergencies, care for homeless people, child protection, social education, early childhood education, training and consultancy. It currently manages more than 100 centres and services across seven autonomous communities, which served 50,000 people last year. With this transaction, Grupo 5 secures its growth plans for the year. In 2016, the company recorded revenues of €37.5 million and expects to exceed €57 million this year. Following the entry of Corpfin Capital, which holds control of Grupo 5, the company expects to reach a workforce of 1,700 employees by the end of the year. Specifically, last summer the fund led a BIMBO that allowed it to hold 97% of the group’s shares, leaving the remaining 3% in the hands of the new management team.
Want to know more?
Corpfin Capital y Grupo 5 – Alimarket.es
The fondo Corpfin Capital y Grupo 5 -Webcapitalriesgo.com
Corpfin Capital compra Grupo 5 – Capital-riesgo.es
View article