The properties were previously operated by Kirkcaldy-based Kingdom Homes whose owners are retiring from the industry. The homes, which together have 480 beds, will now be run by Essex-headquartered Holmes Care Group that already works with Impact Healthcare at a number of sites in Scotland.
The initial consideration is £37.5m, with a potential deferred payment of up to £2.5m subject to the future performance of the care homes.
The investment has been made initially by way of a loan to Holmes Care Group that will allow it to complete the acquisition of Kingdom Homes immediately.
“The structure creates a number of benefits for all stakeholders, including enabling Holmes Care Group to take immediate operational control of the homes, thereby avoiding a potentially lengthy transition period while regulatory approvals are sought to register the operation of the homes in new legal entities, as well as other financial and operational efficiencies,” said Impact Healthcare.
Once the regulatory approvals are received, Impact then has the option to acquire the property assets from Holmes Care Group.
Impact will receive interest payments equal to 8.6 per cent a year for the duration of the loan, and initial rent under the new leases is set at £2.7m, reflecting a gross initial yield of 7.2 per cent.
The investment takes Impact Healthcare’s relationship with Holmes Care to 21 care homes across Scotland, with 1,129 beds.
In a separate deal, Impact Healthcare said it had completed the acquisition of the Springhill nursing care home in Kilmarnock for £3.25m in a sale-and-leaseback deal with Silverline, one of the group's existing tenants. Springhill is a four-storey Georgian building with a substantial purpose-built extension offering a total of 61 beds with en-suite wetroom facilities.
The deal was one of a trio announced by Impact Healthcare including a portfolio of two care homes in Northern Ireland acquired for £11m. Impact stated that both sites are purpose-built in established residential areas and provide a combined total of 147 en-suite bedrooms.
The two homes will be operated by an existing tenant, Electus, and take its total care homes in Northern Ireland to five with 340 beds. The group is to pay a net purchase price of £11.02m to the vendors. The initial annual rent has been agreed at £854,500, reflecting a gross initial yield of 7.8 per cent.
Earlier this week, Impact Healthcare announced that it had agreed £75m of new long-term debt provided by two large UK insurance companies. It had raised £35m from the placing of new shares on the stock market in May.
The trust now has an interest in 112 care homes and 6,191 beds. At the time of its interim results, it said it was looking to pay investors a total dividend for the year ending December 31 2021 of 6.41p a share, a 1.91 per cent increase compared to the previous year.