Nikko completes UK sale-leaseback deal

The principal finance arm of Nikko Cordial has completed the first structured sale and leaseback deal by a major UK private hospital group.

Nikko Principal Investments (NPIL), the European principal investment arm of Nikko Cordial, has completed the purchase of 20 UK private hospitals owned by the Swedish listed healthcare group, Capio AB, for £250m.

Capio acquired the 20 hospitals in 2001 as part of its acquisition of Community Hospitals Group, the UK’s fourth largest private hospital operator. The hospitals will be held through a limited partnership structure, which will be owned 80 per cent by NPIL and 20 per cent by Capio. The properties have been leased back to Capio on a 30-year lease, with an agreed annual rent increase. 

This deal is the first of its kind carried out by a UK major private hospital operator. NPIL chief executive Brian Berry said the firm was hoping to make strong returns on the UK’s growing private healthcare sector.

NPIL, the European principal finance arm of Nikko Cordial Corporation, looks to use the capital base of Nikko Cordial Corporation (previously The Nikko Securities Co Ltd) as it makes investments across Europe. The firm says it is looking for companies and asset portfolios where it can optimise the cost of capital and improve operational effectiveness through restructuring of assets and management. It targets companies in the transport, financial, healthcare, property and leisure sectors.

Transactions by the firm have included the acquisition of of RoadChef, Blue Boar Group Limited and Take A Break Motorway Services Limited, to create one of the UK's largest motorway service area operators. The firm also completed the £507m acquisition of Powell Duffryn, the UK-listed ports and engineering group in December 2000.

In March 2002, NPIL set up a new £20m investment company, NPI Ventures, and entered into an investment agreement with Imperial College Innovations, the technology transfer arm of Imperial College, to invest in spin out companies from Imperial College.