Duke Street Capital buys up Affinity

Duke Street Capital, the mid-market buyout firm, acquired Affinity Healthcare for around £75m. Affinity owns and operates two psychiatric hospitals, Cheadle Royal Hospital in Cheshire and Middleton St George Hospital in County Durham.

The firm has long-standing relationships with NHS commissioners, who regularly refer patients to the firm’s facilities. Affinity also faces limited local competition in a market that is highly fragmented.

“Affinity is a strong business with the potential to become a leader in its field. It is operating in a fragmented, fast-growing market,” said Julian Brock, a director of Duke Street.

The business operates in a market where under-provision is driving demand, and demand as a whole is increasing. In addition, the market is driven by increasing diversification into specialist niches.

Following the transaction, Affinity intends to focus on new business areas such as specialist facilities that provide continuing care, resulting in a longer average length of stay for patients. It will also focus on creating new units to cater for specialist niches.