CMA launches inquiry into CareTech-Cambian deal

CareTech’s purchase of Cambian cleared by CMA
Farouq Sheikh, CareTech’s executive chairman

The Competition and Markets Authority (CMA) has officially launched its inquiry into the completed acquisition of the Cambian Group by CareTech Holdings.

Phase one began last week (13 December), with the deadline for the authority to announce its decision whether to refer the merger for a phase two investigation on 11 February.

CareTech completed its purchase of Cambian on 19 October, however, three days prior the CMA served an initial enforcement order on the two providers in relation to the £372m purchase to investigate the effect of the deal on the children’s care sector.

Earlier this month, CareTech released its unaudited preliminary results for the year ended 30 September 2018.

Revenue increased by 11.9% to £185.7m (2017: £166m), while underlying EBITDA rose by 10% to £43.9m (2017: £39.9m). Underlying pre-tax profit leaped by 11.9% to £32.9m (£29.4m).

Overall capacity went up by 88 places during the year to 2,622 (2017: 2,534), while its property portfolio was valued at £424m.

On the results, Farouq Sheikh (pictured), CareTech executive chairman, said: ‘We have major investment plans for 2019 and beyond with key new organic developments and bolt-on acquisitions.’

As well as using more technology across the business, it will also be ‘exploring opportunities abroad in the international market’.