Narayana Hrudayalaya has announced the acquisition of UK-based Practice Plus Group Hospitals Limited. The investor call highlighted the strategic rationale, emphasizing the UK market’s stability and growth potential. The acquired entity operates with a 93% NHS payor mix, offering opportunities for margin improvement and private payor growth. The deal, funded through Cayman balance sheet, aims for a 20%-22% ROCE by FY29-30.
Strategic Rationale for Acquisition
Narayana Hrudayalaya’s management team, during the investor call on November 3, 2025, outlined the reasons for acquiring Practice Plus Group Hospitals Limited in the UK. The UK market offers stability, a developed economy, and a clear rule of law. The private sector plays a key role in addressing healthcare needs and the acquisition aligns with the company’s long-term growth strategy.
Key Highlights of Practice Plus Group
Practice Plus Group stands out due to its size and management. The company has a good sweet spot in terms of size. Importantly, the entire senior leadership is expected to stay with Narayana Hrudayalaya. The asset operates with a 93% NHS payor mix, marking it as an outlier. There’s a focus on improving efficiencies through technology, mirroring successful strategies implemented in Cayman.
Financial Details and Future Outlook
The acquisition is expected to be EPS neutral in the first year and mildly favorable thereafter. The post-IFRS EBITDA for FY25 is GBP 29 million. A ROCE of 20%-22% is targeted by FY29-30. The deal is funded through the Cayman balance sheet with 40 million pounds as equity. Efforts are underway to integrate Athma, the company’s tech stack.
Growth and Operational Strategies
Key strategies include attracting more private payor patients, expanding into new specialties, and implementing operational efficiencies based on the company’s technology platform. There’s potential to leverage the existing infrastructure and increase non-NHS revenue. It is expected that new services would require new doctors as the company gets more involved. The business has regular maintenance and refurbishment Capex in the GBP 10-20 million range every year.
Regulatory and Integration Aspects
The UK’s clinical regulation is robust, governed by the CQC and related bodies. All of Practice Plus Group’s assets are rated good or excellent by the CQC. Integration of technology is a journey that will begin by starting with low-hanging fruit immediately.
Financial Performance and Future Plans
The company is currently operating with 330 operational beds. Current utilization is 50-55% offering additional space for volume. Plans for near-term integration are underway. It is aimed that the company will be cash breakeven in short years. There are hopes to build on and improve margin. There is an intention is to lower the cost of self-pay care and PMI care.
Source: BSE
