Spire Healthcare is to be the first British private hospital chain to float in London, a move that could value the business at £1 billion.

The UK’s second largest private hospital operator, by revenue, is looking to raise £315 million of growth funds from the initial public offering (IPO), which is expected in July.

The deal, which will also reduce its debt, is being promoted as a play on the country’s population living longer and as a solution to easing the increasing burden on the cash-strapped NHS.


(The Spire Clinic, Droitwich Spa)

Spire owns 39 hospitals and 13 clinics, specialising in hip and knee replacements as well as heart care. Revenues totalled £764.5 million in 2013, up 5.4% in 12 months, giving it a post-rental costs earnings before interest, tax, depreciation and amortisation (EBITDA) of £154.1million.

Spire is targeting a pay-out ratio of some 20%, with the first payment expected for the end of this year.

The IPO provides a partial exit for Spire’s private equity owner Cinven, which established the business when it bought 25 hospitals from private healthcare specialist Bupa in 2007. Cinven has since invested £509 million in the business.

The market will be watching the float closely following several disappointing debuts recently. Vehicle breakdown cover and insurance provider AA (AA.), is the latest indicator that appetite for new issuances could be waning having slipped 6.6% since its debut on Monday (23 Jun).

Issue Date: 25 Jun 2014