24 July 2005
Legal & General Ventures ("LGV") announces the acquisition of a group of nine private hospitals from BUPA Hospitals. The assets acquired, for an aggregate purchase price of £85m, form the basis of a new group called Classic Hospitals which becomes the UK's fifth largest group of private hospitals.
Classic Hospitals owns and operates nine hospitals. These are Clare Park in Farnham, Dunedin in Reading, Elland in Halifax, Fylde Coast in Blackpool, Hull and East Riding in Hull, Methley Park in Wakefield, Regency in Macclesfield, St Saviours in Hythe and Yale in Wrexham. Collectively Classic Hospitals has over 300 beds and employs approximately 2,000 staff.
Classic Hospitals will continue to provide a high quality and comprehensive range of services to its customers in their local markets. LGV has established an infrastructure to support the hospitals and will be seeking to build on the services previously provided by BUPA.
The private healthcare sector has grown each year since 1980 and LGV believes there are a significant number of opportunities to expand the business in the future, supported by capital expenditure in the facilities for which funding has been committed as part of the deal.
LGV has assembled an experienced management team to drive the business forward, with the appointment of four new senior executives: Frank Hollendoner has been appointed Chairman (he is currently non-executive director of Dr Foster and former Chairman of Independent Care, a hospital owner and developer); Adrian Stevensen has been appointed Chief Executive (having spent his entire career in the independent hospitals sector and formerly Chief Executive of Independent Care); Robin Best, has been appointed Finance Director (he was finance director of Oxoid Limited, the successful buy-out of one of the world's leading manufacturers and distributors of microbiological culture media and other diagnostic products); and David Gray has been appointed Chief Operating Officer (he spent almost twenty years with BUPA, managing a number of hospitals and was latterly a consultant at the Department of Health).
The team has a complementary range of skills with extensive experience in running healthcare businesses and will be supported by other new appointments as well as the existing senior management of each hospital. In particular Simon Harrison, Divisional Director of BUPA Hospitals has transferred to Classic Hospitals as Director of Operations.
Classic Hospitals’ head office will be based in a facility adjoining the Dunedin Hospital in Reading.
LGV obtained financing from Halifax Bank of Scotland plc and the Quercus Property Fund. Michael O’Donnell and Joanne Parfrey of LGV have joined the Board as non-executive Directors
Commenting on the investment, Michael Mowlem, of LGV, said: "We are delighted to be backing Classic Hospitals as a new participant in the private hospital sector. This is a first class group of hospitals headed by a dynamic and experienced management team. The private healthcare sector is continuing to demonstrate strong levels of growth and we believe this business has the right credentials to make a significant impact. LGV’s buy & build focus is ideally suited to consolidating Classic Hospitals’ position as a major player in the private hospitals sector."
Clare Hollingsworth, Managing Director of BUPA Hospitals said, "This is a unique opportunity for a company to establish a presence in the independent healthcare market, with Classic Hospitals Ltd becoming the fifth largest operator of independent hopsitals in the UK. We wish all the staff and Classic Hospital Ltd every success in the future."
The investment in Classic Hospitals continues LGV’s focus on its core areas of sector expertise. In the healthcare sector, LGV’s existing investments include Craegmoor Healthcare, Verna Group and LGC.
