(Alliance News) - CareTech Holdings PLC on Monday said its subsidiary CareTech International Ltd has invested in a provider of private outpatient mental health services in the United Arab Emirates.
The social care services provider said it will own a 51% interest in AS Investments Holding Ltd and AS1 Investments Holding Ltd, which holds a majority equity interest in an out-patient facility in Abu Dhabi and a mental health outpatient group of clinics.
The initial consideration for the investment is GBP7.2 million, to be satisfied by GBP3.6 million in cash, the issue of 431,465 CareTech shares and a payment of GBP1.8 million into the AS group to drive growth. In addition, there is a performance driven earn-out mechanism of up to GBP1.6 million to be paid out in 2021.
The cash consideration will be funded from CareTech's existing cash resources and debt facilities, it said.
The move comes amid CareTech mulling opportunities for international expansion. The UAE is an attractive market, the company explained, because the need for improved capacity and expertise in specialist social care, special education needs and mental health services has been recognised and is expected to receive significant focus in the coming years.
"We have been interested for some time in the Gulf region as we believe CareTech can support the local transformation of services through our expertise and experience and expand pathways into specialist social care and special education needs services," said CareTech Executive Chair Farouq Sheikh.
"The AS group is well established and this partnership will lead to a number of exciting opportunities for CareTech in the UAE," added Sheikh.
The AS group is expected to have a combined revenue of AED79 million, about GBP 16.5 million, for 2019, CareTech said.
CareTech shares were trading 0.1% lower in London on Monday afternoon at 418.68 pence each.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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