Waterland's Median Kliniken acquires Priory Group for £1bn

Tim Kimber
31 December 2020

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Waterland Private Equity portfolio company Median Kliniken has agreed to acquire UK-based behavioural healthcare service Priory Group from Acadia Healthcare for approximately ТЃ1bn.

Waterland will wholly acquire the company from US-based healthcare group Acadia Healthcare.

The transaction is expected to complete in January 2021.

The deal is the 22nd bolt-on in Median's buy-and-build strategy since Waterland's first investment in 2011. Following this deal, Median will operate 570 facilities, treating 260,000 patients annually.

Waterland acquired the Median brand from Advent International and Marcol Healthcare in October 2014 in a deal valued at around €1bn, according to Unquote Data. It then sold the real estate for €705m and agreed to lease it back from Medical Properties Trust.

The GP then merged Median with its previous competitor, RHM Group, which it had owned since May 2011, to create a new company that operated 72 clinics with 12,000 beds and 9,500 employees. It currently has a turnover of around £1bn, according to a spokesperson for Waterland.

Previous funding
The Priory group previously spent two decades under private equity ownership, according to Unquote Data. Hg was the first PE investor in the group, completing the £88m buy-in management buyout of Priory in 1996 from US healthcare group Community Psychiatric Centers (CPC). The deal was later syndicated to GPs now known as CCMP Capital Advisors, Montagu Private Equity, Silverfleet Capital and UPM.

The syndicate exited its holding to Westminster Health Care in 2000, which in turn sold it to Doughty Hanson two years later in a £371m deal.

In July 2005, Doughty Hanson sold Priory to ABN Amro, which would later become part of Royal Bank of Scotland (RBS). RBS went on to sell the asset to Advent in 2011.

Advent subsequently made a series of bolt-ons for Priory in education and healthcare services, including the acquisitions of Castlecare Group in 2014, and Life Works and Progress Care in 2015.

Advent sold Priory to US-based Acadia Healthcare in January 2016 for £1.3bn. Acadia subsequently sold 22 of Priory's facilities as part of a regulatory compliance measure to BC Partners in October that same year.

Company
Priory was founded in 1980 when US business CPC bought Priory Hospital Roehampton to be its UK subsidiary. Through several bolt-ons and organic growth – and two decades of PE ownership – the company expanded to include education and children's services, addiction rehabilitation, and elderly care.

Priory supports 30,000 people a year from 450 facilities across the UK. The company expects to record turnover of approximately £800m in 2021, according to a spokesperson for Waterland.

Advisers
Equity – Boston Consulting Group (commercial due diligence); Candesic (commercial due diligence); Deloitte (financial due diligence, tax); Hengeler Mueller (legal); Bristows (legal); Macfarlanes (legal).
Vendor – Rothschild (corporate finance).