Hg's Majority Acquisition of Nourish Care Systems
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Nourish CareTarget
Hg, via its Hg Mercury Fund, is acquiring a majority stake in UK‑based digital social‑care records platform Nourish Care Systems Ltd, with a £20 million equity commitment from HgCapital Trust; financial terms were not disclosed and the deal is slated to close in late August 2026.
Hg’s Hg Mercury Fund announced a majority acquisition of Nourish Care Systems Ltd, the Bournemouth‑headquartered SaaS provider of digital social‑care records, with the transaction set to close in late August 2026. The deal includes an approximately £20 million equity injection from HgCapital Trust, while the overall valuation and purchase price remain undisclosed. Founder‑CEO Nuno Almeida will retain a significant equity stake and continue to run the business, and Livingbridge EP LLP, the previous owner, will roll over a minority interest alongside the founder.
Deal Structure and Stakeholder Roles
The acquisition is structured as a strategic recapitalisation. Hg acts as the lead sponsor through the Hg Mercury Fund, supported by institutional co‑investors. Livingbridge, which bought Nourish in a 2022 management buyout at roughly £35 million enterprise value (about 9.5× ARR), will stay on as a minority shareholder, signalling confidence in the next growth phase. Financial advisers include Houlihan Lokey for the buyer and Arma Partners for the seller, while Skadden and Shoosmiths provide legal counsel.
Strategic Rationale
Hg’s investment aligns with its focus on vertical SaaS businesses that serve essential, high‑retention markets. The firm plans to embed its Hg Catalyst AI engine into Nourish’s platform, converting the product from a compliance‑centric record system into an “AI‑first” system of action that automates routine documentation and delivers real‑time guidance to frontline care workers. By leveraging agentic AI, Hg aims to unlock new revenue levers beyond traditional seat‑based pricing, tapping operational‑expenditure budgets and driving higher net revenue retention.
Market Context
The UK health‑tech sector continues to attract private‑equity capital despite broader macro‑economic headwinds. Structural drivers—an aging population, chronic staffing shortages, and regulatory pressure for certified Digital Social Care Record (DSCR) systems—create a defensible demand base for platforms like Nourish. The acquisition follows a pattern of larger sponsors consolidating fragmented vertical SaaS assets to build comprehensive care‑coordination suites, positioning the combined entity for cross‑sell opportunities across residential, domiciliary, and community‑care segments.
Why It Matters
For Nourish, the partnership with Hg brings deep operational expertise and a dedicated AI incubator, accelerating the rollout of agentic features that could dramatically reduce documentation time for care staff. This technical boost is likely to improve customer stickiness and open upsell pathways to existing residential and home‑care providers, sharpening Nourish’s competitive edge against rivals such as Servelec and OneTouch that are still reliant on legacy workflow tools.
From a private‑equity perspective, Hg’s move reinforces its strategy of scaling vertical SaaS platforms through AI‑enabled product upgrades rather than pure bolt‑on acquisitions. Competitors in the European HCIT space will need to demonstrate comparable AI capabilities or risk losing market share to a platform that can claim both regulatory compliance and operational efficiency gains.
Key Points
- Hg acquires a majority stake in Nourish Care Systems; deal value undisclosed.
- HgCapital Trust commits roughly £20 million equity to the transaction.
- Founder‑CEO Nuno Almeida retains a significant equity position and operational control.
- Livingbridge rolls over a minority stake, indicating confidence in future growth.
- Hg plans to embed its Catalyst AI engine to transform Nourish into an AI‑first system of action.
Analysis
The undisclosed valuation of the Nourish acquisition will likely be benchmarked against its 2022 multiple of roughly 9.5× ARR, suggesting a premium for the AI‑enabled growth trajectory Hg intends to pursue. By injecting the Catalyst AI platform, Hg aims to shift Nourish’s revenue model from pure seat‑based licensing to a hybrid of usage‑based and value‑based pricing, a trend gaining traction across vertical SaaS where operational efficiency can be monetised. This move underscores a broader market shift: investors are rewarding SaaS firms that can embed AI to become “systems of action,” delivering measurable labor savings in addition to compliance. For operators, the deal signals that scaling through AI integration may become a prerequisite for staying competitive in the crowded UK health‑tech arena, while investors may recalibrate multiples for vertical SaaS assets that demonstrate a clear AI‑first roadmap.