Spire Healthcare Group has acquired UK mental and physical health services provider Vita Health Group for £74m.
Vita provides a range of NHS outpatient mental health talking therapies, musculoskeletal and dermatology services, with operational hubs in London and four regional centres in Bristol, Orpington, Oldham and Leicestershire. It also offers outsourced physiotherapy and counselling services to the corporate and occupational health markets.
It is also the largest independent provider of talking therapies and has a diversified customer base of 14 NHS integrated care boards, over 300 corporates and 12 private patient clinics, with around 450,000 appointments delivered in the year ended 31 December 2022.
Its revenue split is approximately two-thirds NHS and one-third corporate, with NHS contracts being predominantly three to five years.
Corporate contracts are in place with major insurance providers, including Axa, Aviva and Bupa, and with corporate clients directly to help them with workforce management.
Spire said the Vita acquisition is complementary to its existing services and aligns well with its strategic ambitions to expand selectively in new verticals to attract customers and meet more of patients’ healthcare needs.
Vita’s leadership team, which is being retained, is supported by a management team overseeing 1,600+ employees.
Spire added the acquisition enables it to expand its capabilities into low-acuity mental health while providing synergies in working with corporate and PMI customers, and occupational health businesses.
It also pointed out that Vita adds scale to Spire’s occupational health offering, building on the acquisition last year of The Doctors Clinic Group, an integrated provider of occupational health and GP services.
Based on current performance and recent contract wins, Vita has a run-rate and forecast which will deliver 2024 revenue in excess of £100m, adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) of around £10m.
Following the acquisition, Spire said the in-year contribution Vita is expected to deliver to the group for the remainder of 2023 is revenue of around £19m. The acquisition consideration will be settled in cash and will be funded with £50m through the group’s revolving credit facility with the remaining funded through existing cash balances.
Justin Ash, CEO of Spire Healthcare, said: “Vita addresses two of the main reasons for long-term illness and absence from work in the UK: mental health issues and back and joint pain.
“This acquisition complements our existing business and aligns well with our strategy of developing new services and moving into adjacent markets.
“The addition of Vita means that we are now able to meet people’s physical and mental health needs. Vita fits closely with the services we offer to corporate customers and gives us a good springboard for future growth.
“With its outstanding patient feedback, strong track record in winning contracts and proven management team, Vita is an excellent addition to our business and I look forward to welcoming our new colleagues to Spire.”
Derrick Farrell, CEO of Vita, added: “We are delighted to be joining forces with Spire.
“Our success over the last five years, driven by the values of putting our patients and colleagues at the centre of everything we do, has established us as a leading provider of community-based healthcare solutions.
“We believe that the commercial synergies, now possible as part of the Spire Healthcare Group, will allow us to stay true to our values, to extend our propositions, move into new spaces and provide more effective solutions right across the expanded group.
“The cultural alignment across the businesses, as represented by the senior management teams, was a key factor in the transaction. Delivering effective solutions for our customers has been at the core of our success and in the Spire team we found that passion fully reflected.
“We are very excited about the future.”