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BUPA agrees hospitals sale
18 June 2007
The Board of BUPA today announced it is to sell its 25 UK hospitals to the European private equity firm Cinven for £1.44 billion.
The sale will have no effect on holders of BUPA health insurance in the UK, who will have access to the same range of hospitals they currently have.
Cinven has significant experience in the private healthcare market. It currently owns Partnerships in Care (PIC), the UK’s leading provider of specialist mental health and related services which operates 940 beds in its 17 facilities around the UK. It was a previous investor in General Healthcare which it developed into the number one private hospital provider in the UK. Cinven is also a former owner of Générale de Santé which was the leading private acute care hospital provider in France.
Val Gooding, Chief Executive of BUPA, said: “We are very proud of our hospitals business which we have built up over three decades. The reason we invested in hospitals in the 70s was because there was insufficient capacity of the right quality for privately-insured patients. Since then there has been a significant increase in the number of quality private hospital facilities - with a choice in most localities.
“The separation of our hospitals from the insurance business will allow the two, as separate entities, to fulfil their potential and make a greater contribution to the UK healthcare economy. We are confident we will continue to enjoy a good relationship with the hospitals group under its new ownership. Our UK insurance customers will, of course, still have access to the same range of hospitals that they have always had.”
Simon Rowlands, partner at Cinven, said: “This is an exceptionally fine business in a sector which we believe has considerable potential. It has an enviable reputation, a good management team and a sustainable business model. The acquisition enhances our position in a market with good growth prospects.”
BUPA will use the proceeds from the sale initially to pay down debt and then to invest in the long term growth of the Group.
It is currently anticipated that, if the other conditions to the sale are satisfied, the £200,000,000 Class A2 Secured 6.254 percent. Notes due 2022 and the £120,000,000 Class B2 Secured 6.812 percent. Notes due 2029 issued by UK Hospitals No. 1 S.A. would be redeemed on the interest payment date on 19 October 2007.
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