The Priory Group, the mental healthcare company with a reputation for attracting celebrity clients, has appointed Philip Scott as its new chief executive after almost a year of being run by an interim management team.
Mr Scott's appointment yesterday surprised analysts who noted that Mr Scott had quit his previous job as chief executive of Southern Cross Healthcare, the nursing home specialist in October, saying he wanted to spend more time with his family.
However, the appointment is a strong one for the Priory, which has struggled in the face of NHS cutbacks in recent times. While the group is best known for the celebrities who check into its rehab clinics, most of its business comes from the National Health Service.
Mr Scott, a former nurse who joined Southern Cross in 2000, was widely credited with driving the growth at the company that eventually enabled its private equity owner, Blackstone, to cash in with an IPO in July 2006. Having paid 162m for Southern Cross in 2004, Blackstone sold off the freeholds of its properties and subsequently floated the business at a market value of 420m.
That record will have made Mr Scott an attractive candidate for Priory's owners. The mental healthcare company has since last March been run by its chairman, Hans Michels, a senior banker at ABN Amro, the Royal Bank of Scotland-owned investment bank that bought the Priory for 875m in 2005.
Last month, ABN sold around a third of the company to Lord Ashcroft, the controversial deputy chairman of the Conservative Party. Lord Ashcroft paid just 44m for his 32.5 per cent stake in the company, valuing the Priory at a sixth of ABN's purchase price.
Lord Ashcroft's investment in the company offers opportunities for expansion overseas, because the peer owns a third of the specialist investment fund Global Health Partners, which has interests across Scandinavia.