Doughty Hanson in Priory MBO

The UK venture capital firm is to back a management buyout at the private healthcare clinic.

Doughty Hanson is leading a management buyout at the Priory, the chain of psychiatric healthcare clinics controlled by Westminster Healthcare. The deal will represent the final part of the disposal program that saw 3i acquire Westminster’s care homes business.

Westminster Healthcare is currently owned by Whitehall, the property fund managed by Goldman Sachs and New York-based Welsh, Carson, Anderson and Stowe. The financial backers are in line to achieve a return in excess of £150m from their exit of Westminster.

NM Rothschild was appointed last September to oversee the auction of Westminster and Doughty Hanson has for some time been linked with a bid for the firm. The price of £288m is in line with market forecasts of a deal in the region of £290m.

The transaction will see the management group, led by Dr Chai Patel, acquire 10 per cent of the equity in the Priory. Patel led management in the original public-to-private deal to acquire Westminster Healthcare for £214m in 1999.

Freshfields Bruckhaus Deringer advised the various shareholders on the transaction and this exit is the culmination of a series of deals which the law firm worked on: it advised on the securitisation and restructuring work undertaken at Westminster, as well as the recent £267 million sale of the Senior Living business (a network of care homes for the elderly) to 3i at the end of April 2002.