Last week, Australia-based Ramsay Health Care (OTCMKTS: RMSYF) announced a significant expansion in the U.K. hospital market. The company revealed it was acquiring Spire Healthcare Group, a leading independent hospital group in the United Kingdom with 39 hospitals, including three neurological rehabilitation centers and a mobile diagnostic scanning fleet. According to Spire’s annual report, the system generates most of its revenue from the National Health Service, which totaled approximately $1.30 billion in 2020. Spire also generated $160.9 million in EBITDA in 2020.
The deal for Spire is valued at A$3.7 billion deal value including A$1.98 billion in debt, which equals about U.S. $2.87 billion. Based on the disclosed transaction value, it is the largest hospital deal of the year so far.
Ramsay Health Care provides health care through a global network of clinical practices, teaching and research facilities. Ramsay Health Care’s global network extends across 10 countries, with over eight million admissions/patient visits to its facilities in over 500 locations.
The deal will deliver high single-digit earnings per share from 2024, according to Ramsay Health Care. The acquisition will be funded through existing debt facilities. Ramsay currently has 8% of the U.K. hospital market, and Spire has 17%. That is a significant part of the U.K.’s health network, so we wonder if the Competition and Markets Authority (the U.K’s FTC) will require any other divestments or concessions for the deal to go through.
