Cinven fully realises shareholding in Spire Healthcare Group plc
Private equity firm Cinven today announces that it has fully realised its shareholding in Spire Healthcare Group plc (‘Spire’ or ‘the Group’), the leading provider of private healthcare in the UK. This follows completion of the sale of a 29.9% stake in Spire to Remgro, the major shareholder of Mediclinic, a leading South Africa-based private hospital group announced on 22 June 2015; as well as the sale of its remaining 8.4% on 26 June 2015.
Since Spire’s successful IPO on the London Stock Exchange in July 2014, its share price has performed strongly, rising by more than 60% from its initial issue price.
Cinven acquired Spire (formerly BUPA’s hospitals) in June 2007 for £1.44 billion. Cinven’s Healthcare team had identified the opportunity for organic growth in the UK private healthcare market given the demographics and pressure on public healthcare resources; also the opportunity to capitalise on Spire’s high quality, purpose built hospital facilities as an independent operator. Cinven had previously invested successfully in the independent hospital sector through its investments in Générale de Santé, the leading private acute care hospital provider in France, and General Healthcare Group in the UK, merged with Amicus to create the number one hospital provider in the UK.
Cinven appointed a world-class management team to Spire including a new CEO, CFO and Chairman. Together with the management team, Cinven achieved significant results in relation to its investment in Spire including:
• The expansion of the portfolio from 25 hospitals at acquisition to 39 through new developments and acquisitions including the acquisition of Classic Hospitals (2008), St Anthony’s (2014) as well as new build hospitals in Edinburgh and Brighton;
• Significant investment in Spire’s facilities and services totaling over £500 million since 2007 including the development of new and existing facilities in areas such as theatre capacity, in-house MRI scanning equipment and dedicated private radiotherapy facilities;
• Improving the complexity of the procedures offered to both private and NHS patients including cardiac and neuro surgery, previously only available on the NHS;
• The successful £704 million sale and leaseback of 12 freehold hospitals to a consortium of property investors in January 2013; with Spire still operating 20 freehold and 19 long leasehold properties (out of 39).
The success of this strategy saw revenues increasing from £564 million in 2008 to £856 million in 2014.
Commenting on the investment, Supraj Rajagopalan, Partner at Cinven, said:
“Spire has performed incredibly well given the economic challenges in the UK since we invested in 2007. The volume of patients treated by Spire, increasingly receiving complex medical procedures undertaken by some of the best physicians in the country, has increased enormously in line with the vision we had for the business when we acquired it from BUPA."
“We backed a highly experienced management team who have been able to grow the business successfully – improving the facilities and services provided - while at the same focusing on the highest quality of patient care. The IPO on the London Stock Exchange last year provided the business with a capital structure that allows it to pursue opportunities that exist in the UK and we wish the management team every success.”
Rob Roger, Chief Executive of Spire, added:
“Spire’s mission is to bring together the best people who are dedicated to developing excellent clinical environments and delivering the highest quality patient care. Since Cinven acquired Spire, investment has transformed the business and it is no coincidence that we have been awarded private hospital group of the year in industry awards for two consecutive years.
“Investment in high quality clinical facilities in the UK has enabled us to attract the best physicians and surgeons to bring their patients to Spire hospitals. It has enabled the business to continue performing strongly and to repeatedly deliver high standards of patient care and satisfaction. We wish to thank the Cinven team whose knowledge of the healthcare sector is first class and who have helped created the platform which enables Spire to continue its growth and highest quality of patient care.”