Phoenix Equity Partners has sold Covenant Healthcare, the company it established in 2002 alongside CEO Dr Magdy Ishak.
Electra Partners Europe has backed a secondary management buyout of the company in a transaction worth £170 million (€249 million; $321 million).
Phoenix established Covenant as a platform to build a private UK hospitals group. It made its first acquisition, the £25 million buyout of the Abbey Hospitals chain of six acute care hospitals, in June 2002.
The company subsequently acquired Transform Medical, a cosmetic surgery clinic group and the Gainsborough Hospital, a secure psychiatric facility later rebranded as Churchill. It also instituted a roll out of additional clinics. The company now undertakes around 15,000 procedures a year.
Phoenix have realised £67.5 million for their shareholding. This represents a money multiple of 6.2 and 100 percent IRR, according to managing partner Hugh Lenon.
The Electra European fund has invested £62 million in the deal, and has committed to make a further £15 million available to fund further acquisitions and organic growth according to a statement.
Last month the firm sold Ashbourne Healthcare, a UK-based operator of care homes for the elderly, to Bank of Scotland Corporate Banking for £280 million.