British healthcare giant Bupa agreed to sell its hospitals business today in a private equity deal worth £1.44bn (€2.13bn).
The operation, which consists of 25 acute care hospitals and one treatment centre, has been bought by European buy-out firm Cinven.
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.
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 sizeable insurance operations in the UK and overseas.
Bupa said in April that its decision to consider the sale of the hospital business also reflected "significant changes" in the UK's healthcare economy, 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 (€6.29bn). Pre-tax profits for the group improved by 15% to £359.1m (€531.9), with the operating surplus for hospitals down 15% to £42.7m (€63.2m) following the sale of nine smaller hospitals in 2005.
Bupa, established in 1947, has 8.1 million customers in 190 countries and employs 46,000 people. The company recently ceased operations in Ireland, citing difficulties with the Government's risk equalisation policy.
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. 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.
One area of growth is likely to be in the British national health service (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.