Spire Healthcare agrees to be taken private in £1bn takeover deal

Private hospitals chain Spire Healthcare has agreed to be bought by a group of investment firms in a deal worth £1 billion. The takeover offer comes from a newly-formed company, named Tulip UK, comprised of funds managed or advised by Toscafund Asset Management, THCP Advisory and Ares Management. London-listed Spire had been in talks with Toscafund, its second largest shareholder, for several months over a possible takeover.

Under the terms of the deal, Spire shareholders have been offered 250p per share, representing a premium of about 66% to Spire’s closing price on May 13. The deal values Spire’s entire share capital at about £1.03 billion on a fully diluted basis. Spire operates 38 hospitals and around 55 clinics in England, Wales, and Scotland, and also runs a network of private GPs and provides workplace health services to over 1,400 employers.

The company has been undergoing a strategic review since last September, with buyers planning a further year-long review post-acquisition that may lead to changes in its primary care businesses, potentially reducing employment in its private GP network. The deal comes amid cost pressures, including inflation and subdued investor sentiment in the UK public markets. Spire believes private ownership will provide greater access to investment and capital for growth, including potential mergers and acquisitions.

Alongside the announcement, it was agreed that Spire’s chief executive, Justin Ash, will step down temporarily, replaced by Sir David Sloman. Debbie White, Spire’s chair-designate, stated that the acquisition aligns best with shareholders’ interests, despite recent volatility in the independent healthcare sector due to cost pressures like national insurance increases and the national minimum wage. Martin Hughes, Toscafund’s CEO, emphasized that as a private company, Spire would gain long-term planning freedom and agility to invest in hospitals, technology, and patient care.

Spire’s shares rose by about 3% on Monday following the announcement.

Source: The Independent