Tunstall secures additional £20 million from Charterhouse: implications?

Breaking News  Tunstall Healthcare Group quietly announced on 25 September an additional investment of £20 million from its private equity owner, Charterhouse Capital Partners. Our readers know from our May and July articles the business challenges Tunstall has faced. We have particularly focused on–as have Bloomberg in May, this Editor and our Founder/EIC Emeritus Steve Hards over the years–on the heavy burden of Tunstall’s debt service, multiple management changes on both sides of the Atlantic, and a decided ‘failure to launch’ in the US market.

Readers of the Sunday Times woke up to this headline and lede (what news writers use to introduce the topic and entice you to read on):

Headline: £20m to steady ship at Tunstall

Lede: CHARTERHOUSE Capital Partners, one of the City’s oldest and most secretive private equity firms, has been forced to provide a multimillion-pound lifeline to another of its investments. A fortnight ago, Charterhouse ploughed £20m into Tunstall, a healthcare technology company that makes equipment to monitor the elderly and sick at home.

Insider Media Limited (business news review) had a more measured take in its ‘Yorkshire News’ section:

Headline: BACKERS PUMP £20M INTO HEALTHCARE FIRM

(under the lede) Tunstall Healthcare Group, which appointed former CPP Group boss Paul Stobart as chief executive last year, said the money would support its growth strategy as it looks to improve a trading performance that included a pre-tax loss of £123m in the year to 30 September 2013.

Insider Media also notes the £220 million turnover (US=revenue)

Contrast Tunstall’s own release which positions this as a vote of confidence in the company (Editor’s highlight):

Headline: Tunstall announces investment in support of strategy

Lede: Tunstall Healthcare Group (‘Tunstall’ or ‘the Group’), the market leading provider of Telehealthcare solutions, today announces that it has secured additional investment of £20 million from its institutional shareholder group led by Charterhouse Capital Partners (‘Charterhouse’), to strengthen its financial position and support the implementation of the Group’s growth strategy.

Support: The investment underlines the shareholders’ support for the strategy being developed by the Group’s new management team, which is the result of a detailed review of the Group’s operations and markets. The Board of Tunstall has confidence that the actions being taken will drive significant further profitable growth.

We note that 2014 results, closing 30 September 2014, will not be available until 30 June 2015 (CompanyCheck). We also appreciate the disruptive effects of the evolution of digital health technology, the wobbliness of the home market after 3ML with the various directions the UK national and local governments are taking, and the highly competitive, ’52-card-pickup’ nature of the US market. But the fresh but negative attention of the Sunday Times when Charterhouse and Tunstall have generally enjoyed the luxury of lack of attention save for the occasional Yorkshire Post article, may well mean that the Magic 8 Ball when shaken, reads “Picture Cloudy.”

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