Australian healthcare giant Ramsay Health Care (ASX: RHC) has today announced it is looking to buy Elysium Healthcare, a leading provider of mental health services in the UK, for $1.4 billion.
According to Ramsay, the acquisition gives it an opportunity to enter the UK mental health market as a leading player with scale and growth opportunities in a sector that is estimated to be worth £15 billion (AUD$28.1 billion).
The acquisition will be funded through the listed healthcare company’s existing debt facilities, and is expected to deliver single digit earnings per share accretion in FY23.
“The acquisition of Elysium will expand Ramsay’s patient pathways into the £15 billion UK mental health market at a time when more and more people are seeking support for mental health, learning difficulties and neurological issues,” Ramsay managing director and CEO Craig McNally said.
“It will provide opportunities to leverage the expertise of Elysium and Ramsay’s existing mental health facilities and clinicians in Australia, France, and Sweden to drive improved patient outcomes across our mental health activities globally.
“Ramsay and Elysium share a strong commitment to clinical excellence, high-quality care and patient safety, with a matching focus on caring for our people and partners. We look forward to strengthening our important partnership with the NHS.”
Formed in 2016, Elysium is an operator of hospitals and complex care homes for individuals with mental health conditions.
It was originally started with 22 hospitals, but has since grown organically and through acquisitions to 72 operational sites, approximately 2,000 beds and 6,000 employees, making it a leader in the independent mental health space in the UK.
Following five years of rapid growth, Elysium reported unaudited revenue of £349m and EBITDAR of £65m for the 12 months ended June 2021.
“This is an excellent opportunity for Ramsay to expand its successful health care services platform in the UK through the acquisition of an established and reputable business, with a strong track record of growth and a robust pipeline of development opportunities,” McNally said.
“It will build on the Ramsay brand and quality reputation with doctors, payors and patients in the UK market.”
Shares in RHC are down 0.81 per cent to $68.94 per share at 11.03am AEDT.
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