HgCapital sells Tunstall to Bridgepoint for £225m

Since HgCapital completed the £102m management buy-out of Tunstall in 1999, Tunstall has doubled profits, from £9m to £18m, representing an annual year-on-year growth of 15 per cent, HgCapital said in a statement. Turnover has increased 56 per cent to £78m. In 2004 the company was recapitalised, allowing £26m to be returned to clients.

HgCapital announced that following the sale, its £51m investment will have returned a total of £136m, representing 2.8 times original cost and an IRR of 22 per cent. A further £3.3m is dependent on current year performance.

Tunstall is a manufacturer and provider of personal and home reassurance solutions. Its core telecare products and services include 'dispersed' alarms, incorporating personal alarms linked by radio to a special telephone unit within the individual's home and connected to a call centre; and 'grouped' alarm systems installed in single sites that combine individual room-based alarms, together with a warden-controlled monitoring system, which is operated by PC and mobile telephone.

Lindsay Dibden, head of HgCapital's healthcare team, said, 'Tunstall is now an exceptional business, poised to benefit further from the clear recognition that telecare is the most cost-effective solution to the reassurance needs of the elderly. The business has developed new products, expanded internationally and improved operations, and is now the leading European player in the sector. After five years working alongside Tunstall's management, we are delighted to be able to sell such a strong business.'

Rob Moores, a partner at Bridgepoint, commented, 'Tunstall already has a track record of strong revenue and profit growth on the back of favourable demographics and increasing awareness of the benefits of the telecare concept. By combining Tunstall with Attendo's Systems & Response division, we will be well positioned to benefit from these trends and improve telecare penetration rates not just in the UK but in continental Europe where there is still much to play for.'

HgCapital is a sector-focused investor in the European private equity market, primarily targeting the UK, Ireland, Germany and the Benelux region. It invests in the consumer, healthcare, industrials, leisure, media and technology sectors and focuses on companies with enterprise values up to €400m. HgCapital has funds under management of €1.3bn. Its other healthcare investments have included Castlebeck and Priory Healthcare.

Bridgepont provides private equity to established companies in a broad range of sectors to fund buy-outs, buy-ins, growth and public-to-private transactions. The firm make investments in middle-market companies capitalised at up to €500m.

Copyright © 2005 AltAssets