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05 August 2015

Charles Russell Speechlys advises CareTech on £9.23m acquisition and amendments to banking facilities

Charles Russell Speechlys has advised CareTech Community Services Limited on the acquisition of Spark of Genius Limited (Spark).

Spark is a Scotland based provider of residential care and education services for young people with complex needs. Spark currently has 48 residential places in 9 residential homes in Scotland and 100 education places in 3 schools.

Spark also offers employability training and leaving-care services for those over the age of 16. In England, Spark has a joint venture with a local authority, which has already registered two residential homes and one school, offering 10 residential and 35 education places respectively.

The total consideration for the acquisition is up to £9.23m, comprising an initial payment of £7.48m in cash and an earn-out of up to £1. 75m, dependent on Spark’s EBITDA performance over the next four financial years.

The Charles Russell Speechlys team advising the Company on the acquisition was led by Partner Michael Lingens, assisted by Corporate Associates Chris Manning and Sarah Aldersley.

Charles Russell Speechlys has also advised CareTech Holdings PLC on amended banking facilities which were due to expire in January 2017. The amendments to the facilities include an extension to the term of the £165m facilities by two years to January 2019, a reduction in the interest rate and deferring four loan repayments due between now and October 2016 amounting to £21.6m.

In addition, a new uncommitted accordion facility has also been agreed of up to £30m, which alongside the deferral of the four loan repayments, further supports CareTech’s acquisition strategy.

The Charles Russell Speechlys team advising the Company on the banking facility was led by Partner Daniel Sullivan, assisted by Bethan Richards.