Narayana Hrudayalaya has announced the acquisition of 100% of Practice Plus Group Hospitals Limited, the 5th largest private healthcare network in the UK, for approximately GBP 183 million. The acquisition is expected to close soon and will be financed through long-term debt. Practice Plus is the 4th largest NHS healthcare service provider in the UK and this acquisition allows Narayana Hrudayalaya to enter the mature UK healthcare market.
Strategic Acquisition
Narayana Hrudayalaya has acquired 100% of Practice Plus Group Hospitals Limited (PPG), marking a significant expansion into the UK healthcare market. PPG is the 5th largest private healthcare network and the 4th largest NHS healthcare service provider in the UK.
Deal Highlights
Key details of the acquisition include:
- Acquisition of Practice Plus Group Hospitals Limited for approximately GBP 183 million.
- Implies a multiple of 9.2x FY25E EV/EBITDA.
- Financed through approximately GBP 150 million in long-term debt with a tenor of 7 years.
Rationale for Acquisition
The acquisition offers several strategic benefits:
- International Expansion: Leverages learnings from Cayman operations into a larger market.
- Mature UK Market: Enters a market shifting towards day-care procedures and private pay models.
- Synergies: Potential benefits from the Narayana Hrudayalaya operating model.
- Low-Risk Entry: Multi-year NHS contracts provide defined revenue visibility.
Practice Plus Overview
Practice Plus Group has three primary divisions:
- Secondary Care
- Integrated Urgent Care (NHS 111)
- Health in Justice (healthcare in prisons)
Financial Performance
Key financial highlights for Practice Plus Group Hospitals Ltd.:
- FY24 Revenue: £229 million
- FY25E Revenue: £250 million
- Target growth at 12% Y-o-Y over the last 5 years.
Looking Ahead
The transaction is expected to close soon, with a 6-month transition services agreement in place to ensure continuity. The current management team and key employees are expected to stay on, supporting future growth.
Source: BSE