BUPA Completes £1.44bn Sale Of Hospitals To Private Equity Firm
BUPA has confirmed that it is to raise £1.44bn from the sale of its 25 UK hospitals to the European private equity firm Cinven and has said it will use the money initially to pay down debt and then to invest in ‘long-term growth’.
The organisation said in a statement that the sale will have “no effect” on BUPA’s health insurance customers in the UK, who will continue to have access to the “full network” of over 200 hospitals, including the former BUPA hospitals.
BUPA’s chief executive Val Gooding said the group originally invested in hospitals in the 1970s because there was “insufficient capacity of the right quality” for privately-insured patients. But she said that is no longer the case and since the 1970s there has been a “significant increase” in the number of quality private hospital facilities, with a choice in “most localities”.
Gooding added: “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.”
BUPA’s hospital division comprises 25 hospitals in the UK and represented approximately 11% of group revenues in 2006, totalling £449m. Although its core business is private work, BUPA also provides services to the NHS and recently signed regional contracts for the North East of England and in Cheshire and Merseyside as part of the Department of Health’s national Phase 2 Independent Sector Treatment Centres programme.
Cinven, BUPA’s private equity purchaser, currently owns Partnerships in Care (PIC), a 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 Group, which owns BMI Healthcare, Britain’s largest hospital group. It is also a former owner of Générale de Santé which was the leading private acute care hospital provider in France.