News and insights | BMI Healthcare

BMI Healthcare

January 2019

BMI is one of the largest private hospital groups in the UK with 59 hospitals and clinics across the country, working with more than 6,000 consultants and employing over 8,000 staff. The hospital group has a national footprint and offers a full breadth of specialities and services.

The Company was founded in 1970 and Netcare, the South African healthcare group, acquired a controlling stake in what was the General Healthcare Group in 2006. Following the acquisition, the group was split into an "Opco" and "Propco" structure, with the Opco becoming BMI Healthcare. Above market fixed annual rent increases, coupled with changes to the market which have seen a contraction in the private medical insurance market and a reduction in NHS referrals, resulted in decreasing profits at BMI.

A capital injection was needed for continued investment in the hospital estate and to ensure ongoing excellent patient care. Negotiations between Netcare and Propco to provide this additional investment finally broke down in December 2017.

Mike Thomas and Neil Robson of THM were introduced to BMI Healthcare during Q1 2018, with Mike being appointed as Chief Restructuring Officer and Chairman of the Restructuring Committee and Neil taking non executive board appointments alongside Mike across the BMI Group.

On 14 December 2018, BMI Healthcare successfully concluded the transaction which saw a capital injection into BMI Healthcare of approximately £60m, a reduction in its annual rent of £65m, refinance of its £115m of banking facilities until 2023, transfer of ownership to HTL and the extinguishment of various liabilities in excess of £600m. These contributions will fund a £250m capital investment programme which is already underway and will accelerate the reconfiguration and refurbishment of BMI Healthcare's extensive estate and underpin the continued delivery of excellent patient care.

"We are grateful for the support and guidance provided by the THM team in what has been an extremely testing period for the management at BMI. We are pleased with the overall outcome and the recapitalisation, which will provide the springboard for BMI Healthcare to strengthen its market position, whilst continuing to provide the very best patient care."
- Karen Prins, BMI Healthcare CEO

Mike and Neil were supported by Philip Goldstein and the THM team worked closely with Stephen Aulsebrook and team at Moelis, Michael O'Donnell as Non Executive Director, Catherine Balmond and Lindsay Hingston and team at Freshfields and Kate Sinclair and Max Rigden from Simpson Thacher & Bartlett.

In addition, THM worked closely with FTI Consulting and Linklaters, advisers to BMl's lenders, PJT Partners and Kirkland & Ellis acting for the lead investors and Houlihan Lokey and Milbank, advisers to HTL.

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