BC Partners acquires £300m Priory hospitals

BC Partners has bought 22 Priory Group hospitals from Acadia Healthcare Group for around £300 million in a deal spurred by a competition investigation.

BC Partners has acquired 22 Priory Group hospitals from its US owners, Acadia Healthcare Group for around £300 million, a person with knowledge of the transaction told Private Equity International's sister title Private Healthcare Investor.

BC Partners declined to comment.

The rehabilitation provider, which runs 322 hospitals, is known for its eponymous London hospital that treats people with addiction issues. The deal does not include the London facility.

The sale was prompted by a competition investigation by the UK Competition and Markets Authority, following Acadia’s £1.3 billion ($2.1 billion) acquisition of the Priory Group from private equity firm Advent International in January this year.

The CMA was concerned that the sale, which would see Acadia add the Priory hospitals to the 32 Partnership in Care mental health facilities it bought for $662 million in 2014, would result in less competition and increased prices. In July the CMA said that Tennessee-based Acadia could avoid an in-depth investigation if the US firm could “offer undertakings which address our competition concerns.”

PHI understands that Priory Group’s previous owner, Advent International, was also in the running for the 22 locations. The sale remains subject to approval by the CMA. An announcement is expected shortly.

Nasdaq-listed Acadia, which operates more than 580 facilities with over 17,400 beds in 39 US states as well as the UK and Puerto Rico, is one of the largest providers of mental health facilities worldwide. In May this year the company bought Tennessee-based TrustPoint Hospital from growth equity and buyout firm HCP & Company.

The sale in January by Advent of the Priory Group saw it receive more than 5.36 million of common shares in Acadia, worth around $346 million, and a further £1.275 billion in cash.