CARE home founder Tom McGhee has sold his Spark of Genius network in a deal that could trigger a windfall of more than £9 million for the former English teacher.
Based in Paisley, Spark provides residential care and education services for young people with complex needs. Its nine residential homes currently have 46 tenants, with a further 85 day pupils across three schools.
Additionally, Spark operates a joint venture with Stockton Council in the north of England, where it has two homes offering ten residential placements plus 35 day pupil placements.
The company is being bought by Hertfordshire-based CareTech Holdings, the Aim-quoted provider of 250 specialist care services throughout the UK. It is paying an initial £7.48m in cash, with a further earn-out of up to £1.75m.
McGhee founded Spark in 1999 following a change of career into developing online learning software. The company began with a project called “Surfing the Web with the kids that school can’t teach”, which used online learning to re-engage with children disaffected from education.
The firm has grown profitably since then, posting a pre-tax profit of £1.2m on revenues of £10.9m in its latest financial year. It employs 300 people.
McGhee – the company’s sole shareholder – and the rest of Spark’s senior management will remain with the business under its new ownership. The deal is expected to be earnings enhancing in its first full year and will be financed from CareTech’s existing resources.
McGhee said the two companies share the same values, which focus on delivering high-quality services to young people with learning and social challenges, adding: “Becoming part of CareTech is a very positive step for all our stakeholders. It will support our growth while we continue to offer excellent outcomes for the children and young people in our care.”
The earn-out includes the issue of 100,000 CareTech shares. Remaining cash payments will depend on Spark’s performance over the next four years.