Duke Street acquired Air Products’ Homecare operations in the UK and Ireland in November 2013. The Company, a non-core subsidiary of a large US corporate, operates in one of Duke Street’s specialist sectors, healthcare. Completion followed an extended nine month due diligence period, reflecting the complexity of the transaction that demanded an open-minded and innovative approach by Duke Street to ensure successful execution of the deal and allowing Duke Street to develop a strong relationship with the management team. The business, renamed Baywater Healthcare, delivers oxygen-therapy, sleep apnoea therapy and non-invasive ventilation therapy services to patients in the home in the UK and Ireland. Baywater was Duke Street’s second deal-by-deal financing. In many ways Baywater is a classic Duke Street investment. The Company enjoys a strong market position being the no 2 player in the UK and no 1 in Ireland. It benefits from strong downside protection through heavy asset backing, strong market fundamentals, and highly visible cash flows. In addition, the company presented multiple routes to value creation through the delivery of a cash flow optimisation plan driven by better logistics, significant cost savings and building stronger in-house capabilities. Baywater’s market is expected to enjoy steady underlying growth driven by an aging population and an increasing need from the NHS to manage cost by providing oxygen for patients in the home. The key disease area served by the company is Chronic Obstructive Pulmonary Disease, incidence of which grew at 3.8% CAGR in the UK between 2009 and 2012. The Company will continue to be led by Adam Sullivan and the former Air Products Homecare Management team with the addition of Howard Jones as Finance Director. Douglas Quinn, the Former CEO of Paragon (now Voyage and a previous successful Duke Street investment) joins the business as Chairman. The undisclosed consideration makes a total cash return of more than 5x cost for Duke Street and its co-investor, Souter Investments with the potential for further returns from an earnout based on future performance. The firm sold Baywater’s Irish operations to Air Liquide in August 2015.

Investors 1