Narayana Hrudayalaya has acquired 100% of Practice Plus Group Hospitals Limited, the 5th largest private healthcare network in the UK, for approximately GBP 183 million. The acquisition aims to expand Narayana Hrudayalaya’s international presence and leverage the UK market’s shift towards daycare procedures and increased private pay. The transaction is expected to close within the next few days.
Strategic Acquisition Overview
Narayana Hrudayalaya has acquired 100% of Practice Plus Group Hospitals Limited, marking a significant expansion into the UK healthcare market. Practice Plus Group is the 5th largest private healthcare network and 4th largest provider of healthcare services to the NHS in the UK. The acquisition is valued at approximately GBP 183 million.
Rationale for the Deal
This acquisition provides Narayana Hrudayalaya with several strategic advantages:
- International Expansion: Leverage learnings from existing international operations for a larger addressable market.
- Attractive UK Market: Capitalize on the shift towards day care procedures and increasing private pay opportunities.
- Synergies: Implement the Narayana Health operating model, including management stability and favorable doctor engagement.
- Low-Risk Entry: Access multi-year NHS contracts with defined volumes and revenue visibility.
Financial Details and Valuation
The purchase price of approximately GBP 183 million represents 9.2x FY25E EV/EBITDA multiple on currently operational centers. Financing for the acquisition includes long-term debt of approximately GBP 150 million with a tenor of 7 years. The acquired entity is targeting growth of 12% year-over-year.
Practice Plus Group Overview
Practice Plus Group has three main divisions:
- Secondary Care
- Integrated Urgent Care (NHS 111)
- Health in Justice (healthcare in prisons)
The company has approximately 1,300 doctors and clinical staff, operates 10 hospitals and surgical centers and attends to over 700,000 cases annually. Revenue for FY24 was GBP 229 million, and FY25E revenue is projected to be GBP 250 million.
Transaction Structure and Timeline
The transaction does not require pre-closing regulatory approvals and is expected to close in the coming days. A 6-month transition services agreement is in place to ensure a smooth handover. The retention of all secondary care management and key corporate employees will further drive future growth.
Source: BSE