BUPA Hospitals

02 July 2007

Tweet
Facebook
LinkedIn
Google plus
Send to

Cinven has acquired BUPAâ€™s 26-strong chain of private hospitals in a Â£1.44bn transaction. BUPA appointedCitigroup to run an auction to dispose of its hospital assets in April having decided to focus on its healthinsurance business. Cinven beat off competition from CVC, Terra Firma and BC Partners in the last roundof the auction process. The price fetched was significantly higher than the Â£1.2bn anticipated. In addition tothe price offered, it is believed that Cinvenâ€™s experience in the healthcare sector strengthened its bid. Cinvenowned General Healthcare Group (GHG) between 1997 and 2000 and counts Partnerships in Care, apsychiatric services provider that was formerly part of GHG, amongst its portfolio companies. It purchasedPartnerships in Care for Â£552m in 2005 (18 April 2005, page 16). Debt on the buyout of BUPA Hospitalswas underwritten by Bank of Scotland and Royal Bank of Scotland.Macquarie, Blackstone and Temasek (the Singapore government investment group) were also thought tohave been interested in BUPA Hospitals. Terra Firmaâ€™s participation in the auction was linked to its attemptto acquire Alliance Boots earlier this year â€“ it had planned a tie-up of the pharmacy side of Boots and theprivate hospital chain. BUPA had previously disposed of nine of its hospitals, which were acquired by Legal &General Ventures in an Â£85m deal in 2005 via newco Classic Hospitals (22 August 2005, page 17).

Company

The UKâ€™s third-largest provider of private medical services, BUPA Hospitals consists of 26 hospitals set up inthe 1970s to provide BUPA insurance customers with access to private healthcare. BUPA Hospitals has forecastrevenues of Â£457m and EBITDA of Â£100.2m for 2007. Medical insurance companies account for in excessof two-thirds of these revenues, with the balance from the NHS and self-pay clients. The group employees5,800 people, 3,300 of which are clinical staff. Cinven intends to grow the business by substantially increasingits level of annual capital expenditure, which currently stands at approximately Â£26m. Additionally, it will seekto win further contracts from the NHS, which continues to increase the outsourcing of healthcare.

People

Simon Rowlands led the deal for Cinven.