Leading private mental health provider to the NHS narrowly avoids liquidation

Active Care Group, a company owned by private equity that cares for hundreds of vulnerable patients for the NHS, has narrowly avoided going out of business. After months of escalating financial difficulties, an administrator was appointed 29 May 2024, who immediately sold the company’s assets in what is known as a ‘pre-packaged sale’ to avoid the company being liquidated.

The sale for over £62mn was to Gadwall Holdings Ltd, a new company set up specifically by Sequoia Economic Infrastructure Income Fund (SEIIF) to acquire Active Care Group (ACG) assets. SEIIF is an affiliate of Luxembourg-based Sequoia IDF Asset Holdings S.A. Sequoia was already a shareholder in ACG, but now becomes the leading shareholder.

The appointment of an administrator and the sale comes at the end of many months of failed negotiations between shareholders and lenders to try and ensure the survival of the company via restructuring and more loans. The company had been in financial difficulties since the end of 2022, according to the administrators report.

ACG is one of the leading providers of inpatient mental health care in the UK as a result of its 2021 acquisition of the Huntercombe Group, and also provides specialist care services to people with complex conditions including acquired brain injury, acquired spinal injury, neurological conditions, and learning disabilities. Income, which from April 2021 to September 2022 was £230.8mn, is primarily from NHS contracts.

In May 2024, NHS England finally heard of the financial difficulties, although as already noted ACG’s financial difficulties began at the end of 2022. NHS England immediately put a stop to ACG taking any new resident patients and ordered ACG to provide daily updates on the situation.

Full story in The Lowdown, 4 July 2024

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