Care UK has bought out-of-hours provider Harmoni for £48m in a deal that will create an organisation providing unscheduled care for more than 15 million patients.
Harmoni won 12 NHS 111 contracts, making the former GP co-operative the most successful commercial provider in the race for NHS 111 contracts. Care UK partnered with Capita to bid for NHS 111 contracts but withdrew from the procurement process early on.
The announcement of the deal follows recent confirmation that Department of Health director of improvement and efficiency Jim Easton, who oversaw the NHS 111 procurement process, is to join Care UK as managing director.
Care UK chief executive Mike Parish told HSJ the strategy was to combine the two companies different capabilities across primary care, social care and out of hours provision to get better results for NHS patients and commissioners.
He said: “Care UK brings a broad range of services and a very substantial balance sheet to support further investment. The deal is beneficial for Harmoni and beneficial for Care UK.”
The new organisation has a turnover of around £700m.
Mr Parish told HSJ “virtually” all of Harmoni’s commissioners had agreed to the change of control before the deal was complete and most of the leadership, including managing director Edmund Jahn, would remain in place.
He added: “What commissioners are seeing is they have got the provider they gave the business to but enhanced with a broader range of services and an even stronger balance sheet.”
Care UK runs over 50 primary care services – including GP and walk-in services, out of hours and diagnostics centres – and six hospitals that carry out elective NHS work.
David Worskett, director of the NHS Partners Network told HSJ the deal made “good business sense”.
He added: “I suspect there may be more consolidation over the coming months and years. In so far as it creates companies that are more sustainable and more robust it is a good thing.”
John Harrison, chief executive of Northern Doctors Urgent Care, a GP co-operative which won the contract to provide NHS 111 in the North East in partnership with the ambulance service, told HSJ the deal would make it harder for smaller providers to compete when NHS 111 and out-of-hours services are retendered.