Spire Healthcare

€ 2,130 million, Aug 2007

Healthcare

Hospital operator

Business
Cinven acquired BUPA’s hospital assets (since rebranded as Spire Healthcare) for a total consideration of £1.4 billion (€2.1 billion) in August 2007. In the first half of 2008, Spire acquired Classic Hospitals for £145 million and Thames Valley Hospital for £23 million. The business now has 36 hospitals throughout the UK with 1,829 beds (18% market share) and 7,600 employees. The hospitals are all high-quality, purpose-built facilities, many of which are either the only operator or the market leader in their local areas. Spire has the highest ratio of beds per hospital of the four national independent providers. The company is expected to benefit from a number of favourable trends that underpin the UK’s private healthcare market including demographics and pressure on public health resources.

Strategy
As an experienced healthcare investor, Cinven has identified significant opportunities to improve operational efficiency as well as for organic growth at Spire. Cinven will be seeking to invest significantly in the operations and skill-sets within the business over the coming years in order to drive organic growth and broaden its service offering.  This is particularly important in the context that Spire is a spin out from a much larger provident organisation which previously had little focus on cash and efficiency. Spire will also be seeking new sources of revenue through both its traditional private medical insurance customers as well as working in partnership with the NHS.

Progress
Cinven’s ownership has given Spire the freedom to grow as an independent company: local hospital directors now have increased autonomy which enables them to market more effectively and helps to re-align the business with local consultants’ needs. The management team have realised significant central cost savings and also synergies arising from the bolt on acquisitions. Cinven has supported Spire’s expansion within the UK through: i) the acquisitions of Classic and Thames Valley; ii) the development of new and existing facilities such as theatre capacity and scanning equipment; and iii) the development of new service lines, for example with the innovative joint venture with Cancer Partners UK. Cinven has also strengthened the management team with a new Chairman, CEO and CFO.