3i backs Farrow House with £21m investment

3i, Europe's leading private equity and venture capital company, has supported a management buyout of Farrow House Limited, a leading provider of adolescent care services in Eastern England. A significant part of the funding will be used to finance the future growth and development of the business.

Farrow House believes that the future of adolescent care is about encouraging positive outcomes.  Its objective, through its highly trained staff, is not only to care for the children, but also to provide them with the skills and education necessary for life post age 16.  As such, it offers a dual education and care service model through its 11 homes and 4 schools located along the East Coast of England. 

3i has strengthened the management team with the introduction of Ian Beard as Chairman.  Ian has worked with 3i previously, latterly as non-executive director of Care Principles Ltd, which provides assessment and treatment services for adults with severe learning disabilities.  Bob Yetzes, Chief Executive, will continue to lead the experienced management team.  Bob, who joined Farrow House in 2002, has an extensive regulatory and education background following a successful management career in industry. 

Management aims to roll out the current model to become the leading provider of adolescent education and care services, focusing on measured quality outcomes for the children.

David Whileman, 3i Investment Director, commented: "Farrow House has an excellent management team and an outstanding track record in the provision of adolescent care services.  In what is currently a fragmented market, we believe quality, professional organisations will drive change and improve overall standards of care.  We are delighted to be involved in supporting the company through its next stage of growth."

Bob Yetzes, Chief Executive of Farrow House, commented: "We are pleased that 3i Plc is our investment partner and believe that their sector knowledge and resources will give us unparalleled support in realising our potential."

3i was advised by the Birmingham offices of PwC Corporate Finance and Maurice Dwyer and Ian Piggin at Wragge & Co.

Andy Parker, PWC, commented ''''We are delighted to have assisted an exceptional management team to raise the funds, not only to buy their market leading business, but to be able to invest large sums into its future development.''''

Wragge & Co private equity partner, Maurice Dwyer, added: "This is another example of the Midlands'' top-tier professional firms working together to bring a complex deal to completion."

Debt facilities were provided by Barclays Leveraged Finance in the Midlands.  Ian Tetsill commented ''''Farrow House and its management team have a strong and growing reputation in its specialist field and with Barclays leading credentials in financing healthcare businesses, we look forward to playing a key role in the future development of the group."

Farrow House was advised by Joanne Ellis at Pinsent Masons.