Mears has announced the £7.4 million acquisition of the Supported Living division of Choices Care Community Services, a company currently in administration.
Choices is a leading provider of social care services in Scotland and the North of England which specialises in providing supported living services to adults with learning disabilities, autism, and mental health needs, in their own homes.
The news follows a board announcement in March when Mears said its strategy was to diversify its offering and to begin supplying services to people with greater care needs in their own homes.
The deal includes trade and some assets of the Supported Living division and features a £5m refundable deposit dependent on the successful novation of the acquired contracts.
It will be funded from Mears’ debt facilities.
The gross assets being acquired are £150,000 and the annual operating profit is estimated to be in the region of £1.5m.
A Mears stockmarket statement said the company would look to integrate Choices into its Care division which already has a significant presence in Scotland.
The benefits of the deal are not expected to feed through until 2012 and beyond.
It is expected to be earnings neutral for the year ending 31 December 2011 after the costs of the restructure, and “earnings enhancing” for the following year.
Mears Group chief executive David Miles said: “This acquisition is the first step towards implementing our stated strategy to develop a broader care offering to our clients.
“The social care market has significant opportunities for organic growth and for further acquisitions.”