Cinven’s U.K. Hospital Operator Spire Plans $535 Million IPO

Jun 25, 2014 5:21 am ET

(Updates with CEO comment in fourth paragraph.)

June 25 (Bloomberg) -- Spire Healthcare Group Plc, the U.K. hospital operator controlled by private-equity firm Cinven Ltd., plans to raise about 315 million pounds ($535 million) in an initial public offering as a rebounding economy may boost healthcare demand.

Spire plans to sell shares on the London Stock Exchange to help reduce debt, and Cinven and some directors also will sell some of their stakes, the company said in a statement today.

The IPO will allow Spire, reportedly a buyout target earlier this year, to get funds to execute its strategy in the U.K., Chief Executive Officer Rob Roger said in a telephone interview. Plans include developing new services, expanding capacity and acquisitions. The transaction ranks as the largest U.K. health-care IPO since 1993, according to data compiled by Bloomberg.

“We will continue to invest in our existing infrastructure by adding new theatres and diagnostics such as services in cardiology,” Roger said. “We also plan to build new sites.”

Spire, which owns 39 private hospitals and 13 clinics in the U.K., says it’s the country’s top private provider of knee and hip surgeries. It is seeking to ride on an economy heading for the strongest growth of any Group of Seven nation this year, with unemployment at a five-year low and house prices soaring. Its private medical insurance business, whose performance is tied to the economy, brings in more than 50 percent of revenue. Revenue at the division was little changed last year at 416 million pounds ($706 million), Spire said in the statement.

Roger said he couldn’t disclose the number of shares being sold, though a prospectus will be filed by early July and the listing is planned for mid-July. JPMorgan Chase & Co., Morgan Stanley and BofA Merrill Lynch are arranging the sale, with Numis Securities Ltd.