Private equity firms Bridgepoint and Triton Partners are among the groups interested in a take-private acquisition of Spire Healthcare, Britain’s largest private hospital operator, according to sources familiar with the matter.
The potential £1.5 billion deal would see Spire, which operates 39 private hospitals across the UK, delisted from the London Stock Exchange and taken into private ownership. Spire has been the subject of takeover speculation for several months, with the COVID-19 pandemic having a significant impact on the company’s finances.
In the year to 31 December 2020, Spire reported a 24% decline in revenue to £931.1 million, while pre-tax profits fell from £58.3 million in 2019 to a £233.7 million loss. The company was forced to close many of its facilities during the pandemic as the NHS redirected resources to tackle the public health crisis.
However, Spire has seen a gradual recovery in patient volumes in recent months as lockdown restrictions have eased. The company treated over 200,000 patients in the first quarter of 2021, up from around 150,000 in the final quarter of last year.
The potential buyout of Spire would represent the latest in a series of high-profile take-private deals in the UK healthcare sector. In March, private equity firm Carlyle agreed a £3.7 billion acquisition of Medi-Rent, the UK’s largest independent provider of medical equipment.
Industry analysts suggest that private equity firms are attracted to the relative resilience of the healthcare sector, even in the face of the pandemic’s disruption. With the NHS facing significant backlogs, the demand for private healthcare services is expected to remain strong in the coming years.
However, any takeover of Spire would likely face scrutiny from regulators concerned about the concentration of private healthcare provision. The Competition and Markets Authority has previously intervened to block mergers in the sector on competition grounds.
Spire and the private equity firms declined to comment on the reported takeover interest. The company’s shares closed 4.2% higher on the London Stock Exchange on Wednesday, valuing Spire at around £1.1 billion.
