Spire sets sights on £1bn London listing

Britain’s second largest chain of hospitals confirmed on Wednesday that it is seeking a £1bn listing in July as it looks to take advantage of increasing opportunities in the healthcare market.

Spire Healthcare, which is owned by private equity company Cinven, is seeking to raise £315m to invest in new hospitals and clinics. If it succeeds, it will become the first British hospital chain to list on the London Stock Exchange.

The group runs 39 hospitals and 13 clinics in the UK and is second only to BMI Healthcare in the provision of non-NHS medical procedures, providing neurology, oncology and orthopaedics services. About half of its work comprises orthopaedic procedures such as hip and knee replacements, although it has recently expanded into more acute care by opening more cardiovascular units.

Rob Roger, chief executive of Spire, said: “We have already invested £509m in our hospital estate over the past seven years and have ambitions to grow and invest further. Bringing Spire to the public markets will enable us to access capital, if required, to realise our growth strategy, thereby providing more patients with access to our services.”

A successful listing would mark the second significant flotation by a private healthcare group in the UK this year. Cambian, which runs homes for the mentally ill, raised around £20m earlier this year.

Spire was created in 2007 when Cinven bought a chain of hospitals owned by Bupa. It recently escaped serious sanctions by the competition watchdog, and its management believes that this, combined with an ageing population and an increase in opportunities to take on NHS work, means that the times are right to seek investor support.

The move comes amid an increase in IPOs across all sectors, with the AA breakdown service and motor insurer joining Zoopla, the property website.

Spire has expanded through the acquisition of Classic Hospitals, the Thames Valley Hospital and the London Fertility Clinic. Last year, it raised about £700m through a sale and leaseback of 12 of its hospitals to pay down debt and fund new investment. The company is planning a free float of at least 25 per cent of issued share capital.

Cinven has hired Bank of America Merrill Lynch and Morgan Stanley to run the sale process. Spire is chaired by Garry Watts, who also chairs Foxtons, the estate agent chain.

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