The Birmingham branch of Barclays Commercial Bank has helped private equity firm Lyceum Capital in the acquisition of Carewatch Care Services from Nestor Healthcare Group in a £37million transaction.

Carewatch is the leading independent provider of home-based social care services in the UK with branches across Birmingham and the wider Midlands.

Carewatch was established in 1993 and was acquired by Nestor in 1998. The firm provides more than seven million hours of home-based social care across the UK each year to the elderly, people with physical or learning disabilities, mental health clients and clients with long-term conditions or requiring care for terminal illnesses.

Social care services provided to people in their own homes continue to grow, with public policy favouring independent living over residential care.

Some 10 per cent of the Carewatch system currently serves the private and direct pay markets; public sector provision serves about one third of the over-65s requiring social care. With many older people having assets and income that preclude eligibility for state funding and with significant increase in the number of over-65s anticipated, there will be growth in the self-funded private pay and direct pay markets for all forms of social and health.

Ian Tetsill, the head of leveraged finance at Barclays, said: “We are delighted to have been able to provide an innovative banking package that will support the management’s growth plans for the business. This is yet another example of Midlands’ dealmakers delivering solutions outside of the region.”

Barclays were advised by the Birmingham team of DLA Piper.

Lyceum plans to augment management and support the company and its franchisees in pursuing growth and new partnership opportunities. With new investment in the Carewatch brand and in the expansion of the company’s range of services to local authorities, primary care trusts and to individual clients, Lyceum will develop Carewatch as an independent company.

Upon completion of the transaction, David Lyon, former CFO of Clinovia, and Michael Horgan, a former MD of Carewatch, will join the management team as joint managing directors and Ron Elder, a Lyceum Industrial Partner, will become chairman.