Private equity firm allowed to buy mental health hospitals

Acadia Healthcare Company bought the Priory Group in February, adding its inpatient and outpatient mental health and social care services to those provided by its UK subsidiary Partnerships in Care.

However, the Competition and Markets Authority said in July the merger may result in a reduction in competition. Acadia offered to sell 22 of the mental health hospitals in England and Wales to two potential buyers.

The CMA today accepted the proposals for Acadia to sell the sites – made up of Priory and PiC hospitals – to private equity firm BC Partners.

The decision follows a consultation by the market regulator last month, and means the CMA will not refer the merger for an in-depth investigation.

In a statement the CMA said it had received no objections to the proposed undertakings. It added: “The CMA liaised closely with the NHS and other key customers throughout its examination of the merger.

“The CMA received no objections to its proposed remedy, or to BC Partners as a proposed purchaser of these hospitals, during its consultations in October.

“The CMA has therefore decided that the anticipated merger will not be referred for an in-depth, phase two investigation.”

It is not known how much BC Partners have offered to pay.

Acadia originally offered to sell 19 sites across England and Wales, but by October it had said it was willing to part with 22, including the newly built, but unopened, Wellesley secure hospital in Wellington, Somerset.

In its proposed undertakings Acadia told the authority key executive management staff will transfer to the new business.

It said: “Acadia shall use all reasonable endeavours to ensure the transfer of key staff with the divestment of the divestment business, including, at the option of the proposed purchaser, the transfer of an executive management team with experience and managerial, operational and technical capability in operating and developing mental health facilities.”

Priory Group provides acute, intensive care, CAMHS, eating disorders, personality disorder, rehabilitation and secure and forensic locked mental health services, with 85 per cent of its work publicly funded.

PiC provides mental health, learning disability, CAMHS, brain injury and trauma and addiction services privately and from NHS referrals.