The group has 39 hospitals across the UK, including the Spire Murrayfield in Edinburgh, and is planning to raise about £315 million to reduce its debts and fund its growth ambitions.
Shares in the firm are expected to start trading on London’s main market at the end of next week, and Spire has set a price range of between 210p and 300p for its initial public offering (IPO). At a mid-point price of 255p, that would give the company a market capitalisation of about £955m, making it eligible to join the FTSE 250.
Chief executive Rob Roger, pictured, said: “We are pleased with the level of investor interest we’re seeing. We believe the dynamics of the UK healthcare market are strong and will strengthen further given the growing UK population and increasing life expectancy.”
Private equity firm Cinven created Spire through the purchase of 25 hospitals from private healthcare group Bupa in 2007. Since then, £509m has been invested in the business, which now employs almost 7,000 people.
Cinven plans to float up to 45 per cent of the company, which delivered an underlying pre-tax profit of £154.1m last year and is the UK’s largest private provider of knee and hip operations. Spire will be the UK’s only private hospital operator listed on the London Stock Exchange and generates more than half of its revenues through private medical insurance (PMI) providers. A quarter of its sales come from the NHS.
The UK private hospital market is said to be worth about £4.6bn and was the subject of a lengthy probe by competition authorities who argued that patients were paying too much for their PMI. Spire’s rival HCA was ordered to sell one or more of its hospitals in London after the Competition and Markets Authority found it had too strong a grip on the market for both self-paying and insured patients.
The London market has seen a flurry of IPOs this year but analysts believe Spire will be one of the last companies to seek a flotation before the traditionally quiet summer period.
Roger said: “Spire represents an opportunity to invest in a business with a strong track record and would be the first UK-based private hospital group to list on the London Stock Exchange. We look forward to welcoming new investors, including our employees and consultants, as we embark on the next phase of our growth. We remain committed to providing the highest quality patient care whilst seeking to deliver sustainable returns for our shareholders.”
Bank of America Merrill Lynch, JP Morgan and Morgan Stanley are joint bookrunners for the IPO, which would be biggest since Saga, the over-50s insurance and holiday provider, joined the market in May with a valuation of about £2bn.