Bain Capital closes in on Priory

Julian Longhurst
14 October 2010

Tweet
Facebook
LinkedIn
Google plus
Send to

More than four months after reports suggested that private equity firms were among the front runners to snap up mental healthcare provider Priory Group, Bain Capital has emerged as the clear favourite.

According to reports today, the US buyout investor has been granted a period of exclusivity to pursue its due diligence analysis, with the bid thought to value Priory at around £1bn. Other private equity firms, believed to include Cinven, Advent International and Blackstone, remain in the frame.

If the deal goes through it will mark a return to private equity ownership after a five-year gap. The group was originally acquired in 2002 by Doughty Hanson in a deal worth £371m.

Doughty Hanson exited in mid-2005 via a sale to the corporate and investment banking division of ABN AMRO. The deal was valued at £875m, and represented a return of 5x Doughty Hanson's original investment, or an IRR of 71%. RBS, the current vendor, inherited the business on its takeover of ABN AMRO in 2007.