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Sunday, August 09, 2009

Business opportunities in the Care Industry

A UK care charity, providing care homes for the elderly, is the first British charity to attempt the takeover over a listed company.

Housing 21 (the charity) is preparing a share offer to buy Claimar Care, the heavily indebted care services provider. Like a lot of care companies, Claimar was suckered during the crazy period, prior to the credit crunch, when it appeared that credit lines were infinite. It now finds itself wallowing in over £21 million of debt. There are a lot of Claimars around.

So here we have a boring old charity taking over a listed company.

The Care Industry is ripe for more of these acquisitions as the pressure on public spending screws the amounts of funding local authorities can pay for elder care.

Look at this story that shows how local authorities are itching to cut expenditure on care services. This is going to put severe pressure on the business models of the care companies. Dick Stroud

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