Advent International to acquire The Priory Group

Advent International, the global private equity firm, today announced that

it has agreed to acquire The Priory Group (“The Group”), the UK’s leading independent provider of

mental health and specialist care services, from The Royal Bank of Scotland Group plc (“RBS”) for an

enterprise value of up to £925 million. The transaction is subject to regulatory approval.

The Priory Group operates from 66 sites and delivers services through 3,355 beds across the country.

The Group works in partnership with the NHS and local authorities to provide a range of treatment

and care facilities including secure and acute services in the mental health sector and neurorehabilitation

therapy. It also offers specialist education for young people with challenging learning

difficulties and behavioural problems as well as complex care services for the elderly, with a particular

focus on dementia.

The Priory Group was established in 1980 with the purchase of the Priory Hospital. Subsequently,

The Group expanded through the acquisition of additional hospitals and diversification of its care

services. It was acquired by RBS in 2007 and has since achieved significant growth. The Priory

Group is one of the leading operators in the mental healthcare sector and offers the highest levels of

complex care in a cost effective package. In particular, The Group has developed market leading

methodologies for tracking outcomes in order to demonstrate the effectiveness of treatments in

improving the lives of patients.

Underlying demand for quality health and social care is expected to continue to rise, driven and

supported by a number of factors including a growing and ageing population requiring more complex

care, lowering social stigmas associated with mental health issues and improved diagnosis of needs

that may previously have gone undetected as well as a raised level of expectation in the effectiveness

and safety of services patients receive. In addition, The Group is well placed to deliver value for

money and outcomes to more healthcare and education commissioners as the basis for private sector

supply to the public sector is defined over the coming year.

Advent will work with the existing management team to support the continued operational

improvements being made across The Group, as well as identifying opportunities for consolidation

that emerge in the sector driven by a strong combination of social trends and economic and

regulatory reform. The Advent team was led by Thomas Allen and Rory Pope.

Thomas Allen, Director, Advent International, said:

“The Priory Group is a leader in delivering sustainable outcomes for the people receiving its

treatments and services. Much of this is thanks to the fantastic team of employees and consultants

who are continuously innovating and delivering personalised programmes in order to maximise quality

of life for individuals and their families. We are backing a proven and seasoned management team led

by Philip Scott who has played an integral role in driving the recent success of the business. As new

investors, we are committed to maintaining the quality of care that has become synonymous with The

Priory Group and look forward to working with Philip and his team to maximize the opportunities that

exist in the UK healthcare market.”

Philip Scott, CEO of The Priory Group, said:

“I am delighted that Advent International has agreed terms for the acquisition of The Priory Group.

Advent is the ideal partner that Priory has been seeking, given its extensive global and UK experience

of successfully owning and managing healthcare investments. As a well funded, leading private

equity firm, we look forward to Advent’s support in developing and growing our business over the next

few years.”

Advent International has been investing in the healthcare sector for over 26 years and has invested in

more than 30 healthcare companies worldwide across a broad range of sub-sectors, including

pharmaceuticals, healthcare services and medical devices. Most recently in 2010, Advent acquired

Centrul Medical Unirea (“CMU”), Romania’s leading provider of premium medical subscriptions and

second largest private clinic chain. Other investments in healthcare services include Median, the

leading rehabilitation care provider in Germany, Craegmoor Healthcare, the UK’s largest independent

provider of specialist care for adults and Casa Reha, a leading nursing home group in Germany.

Advent International was advised by Deutsche Bank and Weil Gotshal & Manges.

More related news »