South Africa’s Mediclinic enters U.K. market

mediclinicSouth Africa’s biggest private-hospital owner, Mediclinic International Ltd., plans to enter the U.K. after agreeing to buy a stake in Spire Healthcare Group Plc for 431.7 million pounds ($683million).   

The deal with South Africa’s Mediclinic has been agreed below the crucial 30pc stake threshold, which would have triggered a full takeover bid for Spire.

The deal would also see Mediclinic continue its diversification outside its home market where a government probe into private hospitals and a mooted national health insurance plan is limiting growth opportunities.

Mediclinic sees a “growing gap in terms of supply” in the U.K. because of an aging population, Chief Executive Officer Danie Meintjes told reporters in a conference call on Monday.

The U.K.’s state-run National Health Service, the country’s biggest provider, is under pressure from private hospitals, which are attracting patients with shorter waiting times.

 “This is an exceptional opportunity for us to gain a strategic investor who understands our business and growth ambitions as we develop our asset base to meet the significant capacity growth we expect for the UK private healthcare sector in the medium to long-term”, said Robert Roger, chief executive of Spire.

“We look forward to working with them to explore ways our two businesses can co-operate to serve both our patients and our shareholders even more effectively.”

“The Spire acquisition gives Mediclinic further currency diversification,” said Wayne McCurrie, a money manager at Momentum Wealth in Johannesburg, referring to pressure on South African companies from a weaker rand. “Mediclinic’s vast private health care experience is attractive for the U.K. market where self-pay for health care is growing.”

Mediclinic is a South Africa-based private hospital group with operations in South Africa, Switzerland and the United Arab Emirates. Spire runs 29 hospitals and employs 8,000 people in the UK and is the second largest private hospital operator in Britain after BMI.