THE UK's largest care home company is poised for further expansion, with a possible stock market flotation, it was reported yesterday.

Southern Cross, based in Darlington, could be floated on the London stock market, potentially raising between £350m and £500m to fund more growth.

The Financial Times reported that Southern Cross' parent company Blackstone, a US-based equity investment company which owns Legoland, was considering the move to fund further acquisitions and help consolidate the highly fragmented nursing home sector.

Flotation is one of the options it is looking at to help the company expand.

Southern Cross, which employs 30,000 people across the UK, and 120 in its Darlington head office, overtook BUPA as the UK's largest nursing home provider in November after it acquired the rival Ashbourne Group for an estimated £85m.

And the company said it would continue to make acquisitions to try to consolidate the sector.

Southern Cross' headquarters are on Darlington's Valley Street, but it is moving to a new four-storey head office in Archer Street next month.

Support and administration staff for the company's homes will be based in the new offices.

The company has grown massively in the last year, tripling head office numbers to current levels and, through acquisitions, increasing its number of care homes from 160 to 573.

Southern Cross has a six per cent share of a market estimated to be worth about £9bn.

The company has been built up through a string of acquisitions, including the original purchase of Southern Cross by Blackstone from West Private Equity in September 2004 for £162m.

Investment firm Blackstone owns merged multiplex cinema chains UGC and Cineworld and visitor attractions including Legoland and London Dungeon owner Mertin Entertainments.

Care homes are seen as a good stock for investors because of the UK's ageing population and massive sums of money spent on healthcare.

It is estimated that the number of over 85s is set to double between now and 2050. Because more private care operators are involved in healthcare than before, companies such as Southern Cross are expected to benefit.

The majority of care is now provided in privately-run homes.

Southern Cross said it could not comment on the reports yesterday, saying only its parent company would be able to comment. However, no one at Blackstone was available for comment.