Runwood’s £350m sale

One of the UK’s largest care home operators, Runwood Homes, has been put up for sale for a price believed to be around £350m, Property Week understands.

Runwood’s owner Gordon Sanders is understood to have mandated Knight Frank to sell the entire share capital of the company.

It is the first time in almost 30 years that the group has been made available for sale. Sanders, who is also the company’s chief executive, bought the business in 1988 for a reported £60,000.

If Runwood is sold for its asking price, the deal would be one of the largest ever in the care home sector and it would be the second major transaction in a matter of months. Bupa sold 122 care homes - almost half of its portfolio - to operator HC-One for around £300m in August.

Runwood, based in Benfleet, Essex, owns 67 residential care homes across England and Northern Ireland and a number of day centres, totalling more than 3,500 beds. It ranks among the top 10 largest care home operators in the country.

The group saw a 10.8% growth in turnover last year, reporting revenues of £117.4m - up from the £105.9m recorded the previous year, according to accounts filed on Companies House.

Sector headwinds

The wider care home sector is facing some headwinds including closures and increasing labour costs, although demand has increased for both beds and occupancy levels within existing care homes.

Recent data from Knight Frank identified a national deficit of 2,612 beds within the sector. Around 280 care homes (7,000 beds) closed down last year, while just 106 new facilities opened.

A nursing shortage triggered by the EU referendum result is also creating concern within the sector. Since July 2016, the number of nurses and midwives coming to the UK from the EU has shrunk by 89%, data from the Nursing and Midwifery Council recently revealed.

Last year, staff costs across the industry increased by 7% - the highest hike since 2009. However, Knight Frank analysis shows that most care home operators mitigated the risk of raising staff costs by increasing their fees. Occupancy rates within the sector were at their highest levels in a decade.

All the parties declined to comment.

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