USP shows Cinven cares

Cinven’s €675m acquisition of Spain’s USP Hospitales continues the European private equity firm’s impressive track record in the healthcare sector.

The deal sees Cinven back a secondary buyout of USP from Mercapital, which invested in the group in 2004. Since then, the Spanish company has grown through several acquisitions.

Now, Cinven plans to help the company continue its acquisition spree, backing further purchases as well as its organic growth.

The Spanish deal comes less than a month after Cinven agreed a €2.13bn takeover of 26 hospitals from Bupa, the third largest provider of private medical services in the UK. That deal reportedly saw stiff competition from parties including private equity firm Terra Firma.

Cinven’s pedigree in the European healthcare sector is well known. In 1997 it bought private healthcare group General Healthcare from Compagnie Générale des Eaux – now Vivendi – for €998m. It then merged the group with Amicus in Europe’s first £1bn leveraged buyout. The firm exited the investment in 2000, realising three times its investment.

It also bought France’s Générale de Santé from Compagnie Générale des Eaux for €725m in 1997. The group floated on the Paris Bourse in 2001, with Cinven selling its remaining stake in 2003 for a multiple of three times its investment.

More recently, the firm bought Partnerships in Care, a UK provider of specialist mental health and related services run by former managers of General Healthcare. The private equity house has expanded the company’s portfolio by more than 40% since it bought the business for €800m in April 2005, as well as helping it to move into new markets.