MAM division offers pounds 93m for group of psychiatric hospitals

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The Independent Online
Mercury Development Capital, the venture capital arm of Mercury Asset Management, has offered to buy Priory Hospitals Group, a private UK-based psychiatric group, from its US owners for pounds 93m.

The proposed deal for the group is subject to Mercury carrying out due diligence checks on the business. MDC said yesterday that the intended purchase would allow it to invest in a developing business with an excellent performance record.

Ian Armitage, a director at MDC, said: "We are hoping to develop the group. It is too soon to talk about expansion or acquisition. In this area, these things happen on the basis of incremental leaps, such as a new unit being built."

Priory Hospitals Group has been owned by Community Psychiatric Centerscor, based in Las Vegas, for about 10 years. It has a number of small hospitals around the country, together with dialysis, forensic and child care units.

The development of a private psychiatric unit in Britain has allowed the US operation to compete for referrals from a variety of sources, including insurers, GPs and the NHS.

CPC said yesterday that the sale valued each bed at almost pounds 130,000. The price is, however, less than is normally paid for beds in private hospitals treating the physically ill, who generate more revenue through a greater use of medical services and supplies.

Mercury Development Capital is the private equity arm of MAM.