Market regulators have launched a consultation into whether 22 private mental health facilities can be sold to two international private equity firms.

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 that the merger may result in a reduction in competition in key NHS services. These are:

  • secure mental healthcare services provided to NHS England and NHS Wales;
  • specialist tier four eating disorder children and adolescent mental healthcare services for 13-18 year olds;
  • acute psychiatric services to CCGs and NHS trusts;
  • psychiatric intensive care unit services provided to CCGs and NHS trusts; and
  • hospital based inpatient rehabilitation services to CCGs and local authorities.

Acadia originally offered to sell 19 sites across England and Wales, but this month said it was willing to part with 22, made up of facilities formerly run by Priory Group and PIC (see box below).

The CMA launched a consultation on 7 October, running till 22 October, so interested parties can comment on whether the proposed sites and the two buyers will address concerns about reduction in competition. The consultation document says the interested private equity firms are BC Partners and Advent International.

It is not known how much either firm is offering or how much Acadia is asking for the sites, which include a newly built but unopened 75 bed, low and medium secure hospital in Somerset.

In the consultation document the CMA says it believes both firms are suitable purchasers.

It adds: “The CMA currently believes that the proposed undertakings and the purchase of the divestment business by either of the proposed purchasers, in the circumstances of this case, is appropriate to remedy, mitigate or prevent the competition concerns identified in the [substantial lessening of competition] decision and form as comprehensive a solution to these concerns as is reasonable and practicable.”

Both companies are understood to be financing the acquisitions with a combination of equity funding and third party bank debt.

Acadia has said if either of the firms buy the 22 sites then the executive team at PIC will transfer over to the new business.

The CMA document says: “The CMA also considers that the proposed undertakings would be capable of ready implementation, because the divestment business is an ongoing business which will be managed by the experienced existing management team of PIC.”

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 being publicly funded.

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

Proposed sites to sell

  • Cefn Carnau – secure services in Cardiff
  • Chadwick Lodge secure services and Eaglestone View rehabilitation services in Milton Keynes
  • Farmfield secure services in Surrey
  • Thornford Park secure services in Berkshire
  • Rhodes Wood eating disorder CAMHS services in Hertfordshire
  • Potters Bar acute services
  • Brighton acute services
  • Recovery First PICU and rehab services in Widnes
  • Ty Gwyn Hall rehab services in Abergavenny
  • The Copse rehab services in Weston Super Mare
  • Aderyn rehab services
  • Rosebank House rehab services in Reading
  • Bromley Road rehab services London
  • St Neots rehab services in Bedfordshire
  • Braeburn House rehab services in Salford
  • Keighley rehabilitation services
  • Brierley Court rehab services in Manchester
  • Springwood Lodge rehab services in Yorkshire
  • Sturt House rehab services in Tadworth
  • Spinney PICU services near Manchester
  • Arbury Court PICU services near Warrington
  • Wellesley secure services in Wellington, Somerset