Private equity firm Waterland is to pay Acadia £1.1 billion for Priory Group, almost five years after the US healthcare firm acquired the business from Advent International for £1.3 billion.

The long-running auction process, conducted by Rothschild and Co, both concludes a difficult foray into the UK market for Acadia and creates a pan-European healthcare services player as Waterland stated it intends to combine Priory with its portfolio company MEDIAN, Germany’s largest provider of rehabilitation, neurology and orthopaedic treatments.

Acadia’s investment into Priory in 2016 followed its previous acquisition of Partnerships in Care, which it purchased for £458.6 million in July 2014.

The combination of the two businesses attracted the attention of the UK’s Competition & Markets Authority, and its investigation into the effects on competition in the mental health sector ultimately led to a sizeable divestment of assets to BC Partners and the creation of Elysium Healthcare.

Dr Carsten Rahlfs, managing partner of Waterland, said: “Both Priory Group and MEDIAN have strong reputations in clinical excellence and in delivering high-quality patient care. I believe that bringing together both organisations will build a powerful platform to deliver world-class healthcare services across Europe, encompassing rehabilitation and mental health treatments.”

Dr Andre Schmidt, MEDIAN chief executive, said: “We are delighted to be partnering with a company and team as prestigious as Priory Group. They have a strong reputation for delivering innovation and quality care for patients in the UK. Demand for the services that both companies provide is set to increase as populations age, as the pressures of modern life grow, and as public healthcare systems come under fiscal pressure.”

Priory Group supports more than 30,000 people a year in over 450 facilities across the UK, focusing on mental health and addiction rehabilitation, special educational services as well as adult care. The group treats for more than 70 conditions including depression and anxiety, addictions and eating disorders.

Waterland, a Dutch private equity firm, last year acquired Sandcastle Care, a Newcastle-based residential childcare provider and also invested in the Silver Stream Healthcare Group in Ireland.

Date published: December 31, 2020

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