The U.S. owner of the mental health care chain Priory sold the business to private equity firm Waterland for £ 1 billion.
Acadia Healthcare, the US company listed on the Nasdaq, had been trying to sell the UK’s largest mental health company for more than a year after buying it for £ 1.3 billion in 2016.
But the deal was on hold due to uncertainty due to Britain’s departure from the EU and the Covid-19 pandemic.
The £ 1.08 billion sale is lower than what Acadia paid for the Priory to Advent International, another private equity firm, four years ago, but Brian Tanquilut, analyst at Jefferies, said that it was “above the expectations of most investors”.
A person familiar with the sale process said this reflected the ‘top’ price paid in 2016 as well as the fact that the company had declined after Acadia was forced to sell certain divisions to address the organization’s concerns. competition regulation.
The Priory, whose clients included model Kate Moss, footballer Ray Wilkins and singer Robbie Williams, has 450 facilities across the UK focused on mental health and addiction rehabilitation and special education services.
Waterland, a Dutch private equity firm, already has a similar business in Germany, with 120 clinics offering mental health care, rehabilitation and addiction treatment.
He had sought to expand into the UK, where he will expand the range of services provided by the Priory to include neurology and other post-acute treatments.
In a statement, Carsten Rahlfs, Managing Partner of Waterland, said the combined activities “would provide world-class health services across Europe, encompassing rehabilitation and mental health treatment”.
Debbie Osteen, chief executive of Acadia, which operates around 582 behavioral health facilities in the UK, US and Puerto Rico, said she plans to use the proceeds to pay off debt. He expects the deal to end in January.
Mental health has been a big victim of UK government cost cutting over the past decade, but it has benefited the private sector.
About a quarter of NHS mental health care beds in England are provided by the private sector, with 98% of private facility income coming from the health service, according to Candesic, a health consultancy.
More recently the margins have come under pressure due to cuts in funding and increased costs – especially staffing, forcing the use of more expensive agency workers.
Private providers say they brought greater specialization and choice to mental health care delivery after it became one of the first parts of the NHS to be privatized amid a trend in the 1970s and 1980s to close large institutions.
But a series of scandals in mental health facilities have damaged the reputations of many providers.
Rothschild advised on the case.