TWO private hospitals in Merseyside and Cheshire are among those being sold by healthcare giant Bupa in a private equity deal worth £1.44bn.
The sale consists of 25 acute care hospitals and one treatment centre, which have been bought by European firm Cinven.
Included in the sale are Murrayfield, in Wirral, and North Cheshire Hospital, in Warrington.
The buyer already owns Partnerships In Care, a leading provider of specialist mental health and related services.
Cinven also has experience of the independent hospitals sector as a result of its investment in Generale de Sante, a hospitals firm in France.
Simon Rowlands, partner at Cinven, said: “This is an exceptionally fine business in a sector which we believe has considerable potential.
“It has an enviable reputation, a good management team and a sustainable business model.
“The acquisition enhances our position in a market with good growth prospects.”
Proceeds from the sale will allow Bupa to fund expansion of its care homes business, which has 298 sites in UK. The group also has insurance operations in the UK and overseas.
Bupa said in April that its decision to consider the sale of the hospital business reflected “significant changes” in the healthcare economy, pointing out in particular the increasing role of the private sector.
Hospitals accounted for 11% of Bupa’s 2006 revenues, which were up 9% to £4.25bn. Pre-tax profits for the group improved by 15% to £359.1m, with the operating surplus for hospitals down 15% to £42.7m following the sale of nine smaller hospitals from its portfolio in 2005.
Bupa, established in 1947, has 8.1m customers in 190 countries and employs 46,000 people. The hospital business provides 1,544 beds and employs 5,800 staff, of which 3,300 are clinical workers.
As a provident, Bupa does not have shareholders and profits are ploughed back into patient care. As well as its board of directors, oversight is provided by 100 members who have no direct economic interest in the company.
Val Gooding, who has been Bupa chief executive since 1998, said: “Cinven has considerable experience in the sector, which was an extremely important consideration in the decision.
“Equally important was their commitment to high-quality healthcare, the growth of the business and the well-being of patients, staff and the hospitals’ other stakeholders.”
Cinven said it would look to “invest significantly” in the operations, including through broadening the group’s services that it offers.
One area of growth is likely to be in NHS work after Bupa was last year appointed to the NHS Extended Choice Network (ECN) - a service that was set up to alleviate NHS waiting lists.