Churchill To Retire To £500m Stock Market Home

Britain's second-largest owner of retirement homes is plotting a stock market listing that would land the brothers who founded it a bumper payout.

Sky News has learnt that Churchill Retirement Living is close to appointing investment bankers to work on an initial public offering (IPO) in London that could take place as soon as this year.

Churchill, which describes its "typical customer" in its accounts as 79-year-old widows, wants to raise capital to expand as it seeks to narrow the gap between itself and McCarthy & Stone (LSE: MCS.L - news) (M&S), its larger rival.

The company is controlled by Spencer McCarthy and his brother Clinton, who are thought to own a large chunk of the shares.

Churchill is said by people close to it to be seeking a valuation when it goes public of more than £500m, meaning the brothers are likely to be worth hundreds of millions of pounds.

Their father, John McCarthy, was one of the founders of M&S, which floated last autumn and now has a market capitalisation of almost £1.3bn.

PricewaterhouseCoopers has been appointed to steer Churchill through the listing process and will help to select the investment banks which will take the company public.

"As a privately owned business, we are always actively assessing numerous funding options to support our ongoing growth plans and we remain focused on delivering against these plans," a spokesman for Churchill told Sky News.

Churchill's board is said to believe that UK population demographics offer a compelling reason for investors to back the company, with forecasts suggesting that the number of over-65s will nearly double to 19 million by 2050.

In its most recent accounts, Churchill, which operates 41 sites across Britain, set a target of doubling its "unit output" over the medium term.

It (Other OTC: ITGL - news) said it wanted to establish 1,400 new retirement flats, or "units", in 2016 at 35 new sites.

"The UK retirement market remains highly fragmented with only four key players of significant scale and a long tail of smaller companies responsible for less than 5% of total market volume.

"As the second-largest developer by unit output, we are very well-placed to help provide the retirement homes that the UK needs."

A source said the timing of the IPO had not yet been determined, and said it could be scheduled for 2017 pending the outcome of discussions with Churchill's advisers (Other OTC: UBGXF - news) .