TIDMSPI
RNS Number : 5917Q
Spire Healthcare Group PLC
19 October 2023
This announcement contains inside information
Spire Healthcare Group plc
('Spire Healthcare', 'Spire', 'the Group' or 'the Company')
Acquisition of Vita Health Group
19 October 2023
Spire Healthcare Group plc (LSE:SPI), a leading independent
healthcare group in the UK, announces that it has acquired Vita
Health Group Limited ('Vita')], a market-leading provider of mental
and physical health services in the UK, for a net cash
consideration of c.GBP74m (the 'Acquisition').
Vita provides a range of NHS outpatient mental health talking
therapies, musculoskeletal and dermatology services, with
operational hubs in London and four regional centres in Bristol,
Orpington, Oldham and Leicestershire. Vita also offers outsourced
physiotherapy and counselling services to the corporate and
occupational health markets. Vita's services address two of the top
causes of illness in the UK. Vita treats mild to moderate mental
health conditions such as anxiety and depression. According to MH
Foundation, 4-10% of people will experience depression and 1 in 6
adults have had a common mental health disorder. MSK problems are
cited by the ONS as the lead cause of economic inactivity along
with mental health conditions.
Vita has a strong ESG platform to support its mental health
patient pathways through successful collaboration with local third
sector organisations such as debt and racism support charities.
Vita's patient pathway covers all modalities of care with a strong
focus on tech enablement and engagement.
Vita is a successful and highly regarded provider in the mental
health talking therapies market, with a track record of
consistently delivering market-leading performance and quality
measures. It is the largest independent provider of talking
therapies. Vita has a diversified customer base of 14 NHS
integrated care boards, over 300 corporates and 12 private patient
clinics, with c.450k appointments delivered in the year ended 31
December 2022. Vita's revenue split is approximately two-thirds NHS
and one-third corporate, with NHS contracts being predominantly 3-5
years. Corporate contracts are in place with major insurance
providers, including AXA, Aviva and Bupa, and with corporate
clients directly to help them with workforce management.
The acquisition of Vita is complementary to Spire's existing
services and aligns well with the Group's strategic ambitions to
expand selectively in new verticals to attract customers and meet
more of patients' healthcare needs. Vita's experienced leadership
team, which is being retained, is supported by a strong management
team overseeing 1,600+ employees. The Acquisition enables Spire
Healthcare to expand its capabilities into low-acuity mental health
while providing synergies in working with corporate and PMI
customers, and occupational health businesses.
Based on current performance and recent contract wins, Vita has
a run-rate and forecast which will deliver 2024 revenue in excess
of GBP100m, Adjusted EBITDA of c.GBP10m, with capex of GBP2-3m.
Following the Acquisition, the in-year contribution Vita is
expected to deliver to the Group for the remainder of 2023 is
revenue of c.GBP19m. The Acquisition consideration will be settled
in cash and will be funded with GBP50m through the Group's
Revolving Credit Facility with the remaining funded through
existing cash balances.
Given the nature of Vita's business, its capex requirements are
limited, which, combined with its strong revenue growth profile,
further underpins the progress being made by Spire Healthcare with
respect to earnings growth and achieving its ROCE targets. The
Acquisition is expected to be earnings accretive. In addition, Vita
adds scale to Spire Healthcare's occupational health offering,
building on the acquisition last year of The Doctors Clinic Group,
an integrated provider of occupational health and GP services.
Vita is part of a c.GBP2 billion UK mental health and
musculoskeletal market, which is forecast to grow at more than 10%
per annum over the period 2021-25 according to PMSI Strategy.
Through the acquisition of Vita, Spire Healthcare is further
diversifying into a market with favourable underlying dynamics.
Vita achieved 37% revenue CAGR over the last five years, driven by
nine talking therapies contracts and c.75 new corporate contracts.
Vita's outstanding track record of delivering excellent service is
driving significant revenue growth.
Justin Ash, Chief Executive of Spire Healthcare, said:
"Vita addresses two of the main reasons for long-term illness
and absence from work in the UK: mental health issues and back and
joint pain. This acquisition complements our existing business and
aligns well with our strategy of developing new services and moving
into adjacent markets. The addition of Vita means that we are now
able to meet people's physical and mental health needs. Vita fits
closely with the services we offer to corporate customers and gives
us a good springboard for future growth. With its outstanding
patient feedback, strong track record in winning contracts and
proven management team, Vita is an excellent addition to our
business and I look forward to welcoming our new colleagues to
Spire."
Derrick Farrell, Chief Executive of Vita, commented:
"We are delighted to be joining forces with Spire. Our success
over the last five years, driven by the values of putting our
patients and colleagues at the centre of everything we do, has
established us as a leading provider of community-based healthcare
solutions and we believe that the commercial synergies, now
possible as part of the Spire Healthcare Group, will allow us to
stay true to our values, to extend our propositions, move into new
spaces and provide more effective solutions right across the
expanded Group.
"The cultural alignment across the businesses, as represented by
the senior management teams, was a key factor in the transaction.
Delivering effective solutions for our customers has been at the
core of our success and in the Spire team we found that passion
fully reflected.
"We are very excited about the future."
This announcement contains inside information for the purposes
of Article 7 the Market Abuse Regulation (Regulation (EU) No
596/2014), as it forms part of UK law by virtue of the European
Union (Withdrawal) Act 2018. The person responsible for arranging
release of this announcement is Philip Davies, Company
Secretary.
-Ends-
For further information please contact:
Spire Healthcare
Angus Prentice - Director of Investor
Relations +44 (0)20 7427 9000
Instinctif Partners
Damian Reece
Guy Scarborough +44 (0)20 7457 2020
Registered Office and Head Office:
Spire Healthcare Group plc
3 Dorset Rise
London
EC4Y 8EN
Registered number: 0 9084066
About Spire Healthcare
Spire Healthcare is a leading independent healthcare group in
the United Kingdom, with 39 hospitals and over 30 clinics, medical
centres and consulting rooms across England, Wales and Scotland. It
operates a network of private GPs and provides occupational health
services to over 700 corporate clients.
Working in partnership with over 8,760 experienced consultants,
Spire Healthcare delivered tailored, personalised care to
approximately 926,500 inpatients, outpatients and day-case patients
in 2022, and is the leading private provider, by volume, of knee
and hip operations in the United Kingdom. The Group's well-located
and scalable hospitals have delivered successful and award-winning
clinical outcomes, positioning the Group well with patients,
consultants, the NHS, GPs and Private Medical Insurance (PMI)
providers. 98% of Spire Healthcare's inspected hospitals and
clinics are rated 'Good', 'Outstanding' or the equivalent by health
inspectors in England, Scotland and Wales.
NHS talking therapies
The NHS talking therapies service started in 2008 and is
internationally successful as an evidence-based, structured mental
health programme. It is recommended by NICE and has been rolled out
in several countries in a similar format and is being developed in
others.
Additional information on Vita and the Acquisition
Key members of Vita's management team include Derrick Farrell
(CEO), Mark Driver (Deputy CEO), Steven Foster (CFO) and Emma
Weighill-Baskerville (CCO).
Vita has been acquired from certain funds advised or managed by
ARCHIMED, as well as certain current and former employee
shareholders of Vita.
The Acquisition constitutes a class 2 transaction for the
purposes of the UK Financial Authority's Listing Rules. Vita's
total gross assets as of 31 December 2022 were GBP28.3m and Revenue
and Adjusted EBITDA for the year then ended were GBP63.1m and
GBP4.1m, respectively.
Important notices
This announcement contains certain forward-looking statements
relating to the business of Spire Healthcare and its subsidiaries
(collectively, the "Group"), including with respect to the
progress, timing and completion of the Group's development, the
Group's ability to treat, attract, and retain patients and
customers, its ability to engage Consultants and GPs and to operate
its business and increase referrals, the integration of prior
acquisitions, the Group's estimates for future performance and its
estimates regarding anticipated operating results, future revenue,
capital requirements, shareholder structure and financing. In
addition, even if the Group's actual results or development are
consistent with the forward-looking statements contained in this
announcement, those results or developments may not be indicative
of the Group's results or developments in the future. In some
cases, you can identify forward-looking statements by words such as
"could," "should," "may," "expects," "aims," "targets,"
"anticipates," "believes," "intends," "estimates," or similar
words. These forward-looking statements are based largely on the
Group's current expectations as of the date of this announcement
and are subject to a number of known and unknown risks
and uncertainties and other factors that may cause actual
results, performance or achievements to be materially different
from any future results, performance or achievement expressed or
implied by these forward-looking statements. In particular, the
Group's expectations could be affected by, among other things,
uncertainties involved in the integration of acquisitions or new
developments, changes in legislation or the regulatory regime
governing healthcare in the UK, poor performance by Consultants who
practice at our facilities, unexpected regulatory actions or
suspensions, competition in general, the impact of global economic
changes, risks arising out of health crises and pandemics, changes
in tax rates, future business combinations or dispositions, and the
Group's ability to obtain or maintain accreditation or approval for
its facilities or service lines. In light of these risks and
uncertainties, there can be no assurance that the forward-looking
statements made in this announcement will in fact be realised and
no representation or warranty is given as to the completeness or
accuracy of the forward-looking statements contained in this
announcement.
The Group is providing the information in this announcement as
of this date, and (except as required by applicable law) disclaims
any intention or obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
No statement in this announcement is intended as a profit
forecast or profit estimate and no statement in this announcement
should be interpreted to mean that earnings or earnings per share
for Spire or Vita, as appropriate, for the current or future
financial years would necessarily match or exceed the historical
published earnings or earnings per share for Spire or Vita, as
appropriate.
Certain figures contained in this announcement, including
financial information, have been subject to rounding adjustments.
Accordingly, in certain instances, the sum or percentage change of
the numbers contained in this announcement may not conform exactly
with the total figure given.
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END
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