Greater Manchester young people’s services provider acquires residential care operator

A Greater Manchester company which provides care services to vulnerable young people has purchased a children’s residential care provider also based in Greater Manchester.

CFS Care was established in 2016 and is based in Atherton, Greater Manchester. The OFSTED-regulated company provides fostering, supported accommodation and residential care services for local authorities across the North West and employs around 55 staff.

The company has purchased Next Stage 4 Life, a residential young person’s care operator based in nearby Bolton, which manages eight homes on behalf of local authorities across Bolton, Bury, Wigan and Chorley. The business employs around 65 staff.

The acquisition will allow CFS Care to expand its young people’s care operations complementing its existing fostering, supported accommodation and residential young people’s care provisions. It was funded through a debt facility provided by Shawbrook Bank’s specialist healthcare team. The team was led by Christos Christodoulou and Benjamin Sanders.

Kim York, chief executive at CFS said: 

Our business is built on the principle of putting the young people in our care, as well as our carers, at the heart of everything we do and this was the key reason behind the acquisition.

Expanding our residential care service means we can offer the support which best suits the particular needs of young people brought into our care and gives them a safe and nurturing home environment - whatever that may be.

Next Stage 4 Life has a strong reputation in the Greater Manchester and Lancashire area with an excellent and experienced team. I’ve thoroughly enjoyed welcoming them to the CFS Care family.

National accountancy and business advisory firm MHA supported CFS on the acquisition, providing a wide range of corporate finance and due diligence advice, alongside banking and finance services. MHA is the UK member firm of Baker Tilly International, the world’s ninth largest international network of independently owned and managed accountancy and business advisory firms.

MHA’s team was led by corporate finance director Rob Holgate, supported by Oliver Toseland. Banking and finance director Carl Hall provided debt advisory services. Transaction services partner Rob Dawes, supported by Stefan Denieffe provided financial due diligence while tax advisory partner David Hackett, supported by Steve Haywood and Jack Swindlehurst provided tax due diligence.

Legal advice to CFS Care was provided by Harrison Drury, with the advisory team being led by Hayley Goodwin and Wendy Catterall from the corporate team, Jennifer Potts from the commercial property team, and Emma Butterworth from the employment team.

Rob Holgate, MHA said: 

The children’s care sector plays a hugely important role in our society, providing a safe and supportive environment for often vulnerable young people. Transactions like this one enable care providers to continually improve, diversify and grow their offering to support more young people.

MHA has advised on a range of transactions in the sector over recent years and during this time we have also expanded our mergers and acquisitions expertise in the North West, with new senior appointments in transaction services, banking and finance and other areas.

This means we were able to provide an end-to-end service to CFS Care, structuring a deal which will maximise the benefits for both companies and, crucially, the young people they serve.

Cowgills, led by corporate finance partner James Kennedy, provided corporate finance advice to Next Stage 4 Life while legal advice was provided by Gateley. Pinsent Mason provided legal advice to Shawbrook.

Benjamin Sanders, associate director – healthcare, Shawbrook said: 

The UK’s care sector provides vital services to people of all ages and needs and supporting its growth directly impacts the lives of vulnerable people across the country.

It’s vital that acquisitions of this type are properly financed, which often includes growth capital, so the companies involved can expand the scope and range of their services to best suit the needs of those they help, increasing their positive contribution to society.

It’s been a pleasure to work closely with all parties involved to support this acquisition and I’m looking forward to following CFS Care’s continued growth over the coming years.