Ramsay Health Care buys UK-based Spire Healthcare for $1.39b

It owns 39 hospitals and eight clinics across England, Wales, and Scotland.

Australia-based Ramsay Health Care is acquiring 100% of UK-based Spire Healthcare’s issued share capital for a total of $1.39b (A$1.8b) by way of a scheme of arrangement, the company announced in a bourse filing.

Ramsay reached an agreement with Spire’s board on the terms of a recommended all cash offer of 240 pence per share. The price represents a premium of about 24.4% to the closing price of Spire shares on 25 May and a premium of 47.6% to the volume weighted average Spire share price over the 180 day period ending 25 May.

Mediclinic International and the former Chairman of Spire, Garry Watts, have provided irrevocable undertakings to vote in favour of the scheme, which represent about 30.4% of Spire’s issued share capital on 25 May.

Ramsay will fund the acquisition from existing debt facilities. Following completion of the transaction, it will look to manage its wholly owned funding group (WOFG) leverage within its current investment grade credit rating targets, through capital management initiatives and/or a strategic review of the Ramsay Group portfolio of assets.

Ramsay also intends to engage with the UK Competition and Markets Authority (CMA) in relation to the transaction. As part of this process, the CMA may require that Ramsay make divestments of certain hospitals and/or clinics, after the transaction becomes effective. The CMA is likely to require the two businesses to be held separately until its review is complete.

Spire owns 39 hospitals and eight clinics across England, Wales and Scotland. It has 14,200 colleagues, and works with almost 7,500 consultants, who together delivered personalised care to almost 750,000 patients in 2020.