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Healthcare buyout marks Palatine’s first Fund III deal

Palatine Private Equity has completed the management buyout of Vernacare, the UK’s market leading provider of single use infection control systems to the healthcare sector. This is Palatine’s first deal from the GBP220m Fund III which closed in June this year.

Based in Bolton, Vernacare employs over 200 staff across the UK and North America and sells to a varied customer base in more than 50 countries worldwide.
The company manufactures and supplies a range of products including the Vernacare system, which is the most widely adopted single-use disposable system in the UK healthcare market. It is comprised of moulded fibre containers used for toiletting, washing, bathing and caring for patients throughout their stay, in addition to Vortex disposal units that hygienically dispose of the containers and contents.
Vernacare is the market leader in the UK supplying to 260 NHS Hospital Trusts, and has an established presence in the rest of Europe, Canada, Australia, and the Far East. The company is currently pursuing further international growth opportunities and has recently signed an agreement with a leading healthcare provider in China as part of the Chancellor’s recent trade visit.
The deal sees Palatine, which typically invests between GBP10m and GBP30m of equity, take a majority share in Vernacare. The firm will work with the management team, which is led by CEO Matt Miller and CFO Paul Wright, to grow product sales and accelerate the expansion into overseas markets.
Debt facilities for the transaction were provided by the Financial Sponsors and Corporate Transactions teams at The Royal Bank of Scotland and NatWest (David Amos and David Jamieson).
Palatine partners Ed Fazakerley and Andy Lees led the deal, along with investment manager James Winterbottom. Fazakerley and Lees have joined the company board as non-executive directors.
Ed Fazakerley (pictured), partner at Palatine Private Equity and non-executive director at Vernacare, says: “Vernacare is well established in the UK and whilst there remain further opportunities for domestic growth, our main focus will be on the continued expansion of the international side of the business. We have been highly impressed by the quality of the management team and their focus on developing both the product range and driving overseas expansion. We look forward to working with them in this next stage of the company’s development.”
Matt Miller, CEO of Vernacare, says: “The Vernacare system has tremendous benefits to both patients and carers. Not only is it an environmentally friendly solution, it also helps to reduce the risk of cross infection when caring for bed bound patients, an issue which has gained increasing prominence across the world in recent years. Working with Palatine will enable us to continue the development of our global footprint and placement of our products in high quality healthcare facilities worldwide.”
Clearwater International (Phil Burns, Ramesh Jassal, Nick Horrocks and Chiara Pettinicchio) and a legal team from DLA Piper led by Yunus Maka advised the shareholders of Vernacare on the transaction.
Grant Thornton (Matt Brydon Smith, Gemma Hardy and Caroline Hadfield) provided advice to the management team and Baker Tilly (Colin Smyth and James Morris) provided tax advice to Palatine.
A team from Deloitte (Jodi Birkett, Paul Maddison) provided buyside advice to Palatine along with tax due diligence (David O’Leary and Avril Edney) and commercial due diligence (Tony Drabble).
Palatine’s legal advice was provided by Gateleys (Rebecca Grisewood, Kate Richards and Ric Sealy) with management being advised by Brabners (Tony Harper, Tamsin Eastwood and Lydia Edgar).
A team from EY, including Partners Richard Harding and Noam Handler, Director Stuart Thwaites and Assistant Director James Raine, provided vendor due diligence to support the transaction. 

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