Private hospital group Spire Healthcare has confirmed that it is planning an initial public offering (IPO) on the London Stock Exchange.
The company says it is hoping to raise as much as £315 million that will fund plans to grow its share in the private health service market.
Currently owned by private equity firm Cinven after it bought Bupa’s hospital business seven years ago, Spire is now the second-biggest private hospital chain in the UK with 39 hospitals and 13 clinics across the country. Overall it generated pre-tax earnings worth more than £154 million last year after rental costs.
The specific number and pricing of shares has not yet been announced, but Cinven has now said that it intends to float at least a 25 per cent stake in the healthcare provider, and it is reportedly looking at a valuation of around £1 billion excluding debt.
According to Rob Roger, Spire’s chief executive, the company has maintained low rates of return to theatre and unplanned readmissions at its hospitals alongside below average infections rates. That has contributed to high-quality care that will make the firm attractive to investors.
“We have already invested £509 million in our hospital estate over the last seven years and have ambitions to grow and invest further,” he explained.
“Bringing Spire to the public markets will enable us to access capital, if required, to realise our growth strategy, thereby providing more patients with access to our services.”
Gary Watts, non-executive chairman, added that continually high levels of investment have created the right conditions to support future growth.
It comes after another private healthcare group Cambian also floated earlier in the year. The company, which runs a group of homes for those with mental illnesses, managed to raise around £20 million.
With the NHS opening up to increasing levels of competition, many private care providers have begun looking at ways to raise capital so they can bid for contracts and provide more health services.
The UK’s population is ageing rapidly, and officials have raised concerns that supply may be unable to meet demand without closer collaboration with private healthcare providers.
Find up to date information on the FTSE 100 and spread betting strategies at City Index
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.