Pegasus Retirement Homes plc, a developer of luxury apartments for the active retired, has completed a second management buy-out.
Clearwater Corporate Finance advised management on the deal, which sees Royal Bank of Scotland Equity Finance replace RO Trading as equity partner.
The management team, which now has a controlling interest, was led – as it was in 1998 – by chief executive Peter F Askew. He is supported by Mike Gill, Doug Jones and Derek Burton and will be joined by new non-executive chairman Matthew Thorne, the former group finance director of retirement home specialist McCarthy & Stone.
“RO Trading has supported the growth of Pegasus since the first management buy-out in 1998,” explains chief executive Peter Askew. “RO Trading, in conjunction with the management team, decided that for Pegasus to move to the next stage in its development it would benefit from a new, larger partner.
“As a consequence, the business was offered for sale in January 2007 and management emerged as the majority shareholder group. Pegasus now has significantly increased debt facilities to fund the growth of the business. Our aim is to grow turnover from £40 million to £100 million per annum.”
Since opening its first development in Cheltenham in 1984, Pegasus Retirement Homes has built in over 53 locations, providing in excess of 1,200 homes and earning numerous industry and architectural awards. It has a land bank sufficient to build 1,350 units. The company’s strong platform for growth will see it spreading its geographical coverage in what is seen as an attractive and growing sector occupied by the cash-rich over-55s.
“We have a high capacity for growth based on a unique outsourced model involving business partners,” explains Askew, who is chairman of the Retirement Housing Group of the Home Builders Federation. “A high quality board, management and staff team complements a dedicated external resource to provide the business with a future full of possibilities.”
Marc Gillespie from Clearwater’s London office who was assisted by Ben Wilson said: “Having advised the management team on their acquisition of Pegasus nearly 10 years ago, I am delighted to see what a success they have made of the business and help them take it to the next stage of its growth.
“Pegasus is now one of the UK’s leading developers of purpose-built retirement properties, with a track record for providing comfortable, manageable and secure homes which fulfil the lifestyle aspirations of the over-55s. With a growing number of active retired and a shortage of such developments on the market, the company has huge potential.”