Cambian to sell adult services business for £377m

Behavioural health service provider Cambian has agreed to dispose of its adult services business to Universal Health Services for £377m in cash.

The price represent an enterprise valuation of around 2.9x full-year 2015 revenue of £129.5m for the adult services business.

Cambian said the sale will allow the company and its subsidiary undertakings to focus on being “a market leading provider” of children's services, where the board of directors sees significant opportunities for growth, development and the creation of shareholder value.

Most of the disposal consideration will be used to repay Cambian’s existing indebtedness in full.

In addition the group intends to announce a £40m return of capital to its shareholders following completion in the first half of next year.

Chairman Christopher Kemball said: “The consideration from the proposed disposal will enable us to fully pay down debt and provide adequate working capital for the development and roll-out of the children's services business at a time of significant and growing demand for its critical services. It also offers an opportunity to return capital to shareholders."

At 1110 GMT, the shares were up 6.3% to 139p.