BUPA to sell its hospitals to Cinven

BUPA to sell its hospitals to Cinven
LONDON: British United Provident Association Ltd. (BUPA) is selling its 25 U.K. hospitals to private equity firm Cinven Ltd for 1.44 billion pounds. BUPA is now focusing on its core insurance business.

Britain's largest medical insurance provider said the sale will not affect is insurance customers as they will be able to access the hospitals. The firm intends to use the funds received from the sale to cut down its debt and invest in improving its insurance business.

Val Gooding, chief executive of BUPA, said the company invested in hospitals in the 1970s in order to meet the increasing quality hospital needs of its privately insured patients. However, there are now adequate private hospital facilities in the country.

BUPA tried to buy Community Hospitals in 2000, but it had to give up the attempt on competition grounds. It has spread its operations overseas to countries like Spain, Australia, Denmark and the U.S.

In Britain, the hospitals offer non-emergency care for patients from the National Health Service as NHS has been sending patients to private hospitals to reduce waiting lists.

Cinven, the European buyout firm, which has substantial funds under its management, said it has been watching this opportunity and there is a good opportunity for the private sector to engage more. The firm had acquired Partnerships in Care, which offers services to patients having mental illnesses, for 552 million pounds some two years ago. It also owns General Healthcare, which is now the biggest private hospital provider in the U.K., and Phadia AB of Sweden, which it bought for 485 million euros from Pfizer Inc. and a stake in Generale de Sante of France

Cinven said it intends to finance the deal with 369 million pounds of cash and the balance through loans secured on BUPA's land assets

BUPA had said in April it was in talks to sell its hospitals unit and had appointed Citigroup as manager for the purpose.