Classic Hospitals (United Kingdom) - Jan 2008

unquote
01 January 2008

Tweet
Facebook
LinkedIn
Google plus
Send to

LGV has sold Classic Hospitals Group to Spire Healthcare, the group of former BUPA Hospitals, now owned by Cinven for £145m. It is believed that LGV recouped approaching 3x its money and an IRR of approximately 50% from the divestment. The deal sees Classic Hospitals’ portfolio of 10 hospitals reunited with other former BUPA hospitals under the Spire umbrella. Having received a number of approaches for the business, LGV hired Rothschild to run a sale process in which solely UK-based trade players competed. Michael O’Donnell led the exit deal for LGV. Cinven acquired 26 BUPA hospitals for £1.44bn in 2007, naming the business Spire Healthcare shortly afterwards (2 July 2007, page 26). Cinven would not disclose whether additional debt or equity was involved in this purchase.

Previous funding

LGV acquired nine hospitals from BUPA in July 2005 for £85m (22 August 2005, page 17). Bank of Scotland provided a debt package to support the deal, alongside the sale and leaseback of three hospital sites arranged by Querus Property Fund. Under LGV’s stewardship, Classic Hospitals purchased Lourdes Hospital in Liverpool from a religious order in 2006. LGV’s role at Classic Hospitals saw it assemble a new management team, establish a head office in Reading and create Classic Hospitals as a brand. Additionally, LGV backed Classic Hospital’s growth by investing £23m in updating its facilities. Classic Hospitals employs 2,000 people and reported EBITDA of £5.6m on revenues of £94m in 2006/07.

Advisers

Purchaser - Freshfields Bruckhaus Deringer, Adrian Maguire, Chris Davis, David Higgins, Mark Wheelhouse, Sebastian FitzGerald, Victoria Marland (Legal)Vendor - Ashurst, Bruce Hanton (Legal)Vendor - Rothschild , Hedley Goldberg, Michael Buckley, Rachael McVitty (Corporate Finance)