General Healthcare / Covenant Health / Transform Holdings
| Case Outcome | Mergers - phase 1 clearance with undertakings in lieu |
| Decision Date | 09 November 2010 |
| Date | 09 November 2010 |
| Subject Matter | Mergers |
| Court | Competition and Markets Authority (EW) |
Completed acquisition by General Healthcare Group of control of four
Abbey hospitals and de facto control over Transform Holdings
Limited, previously part of the Covenant Healthcare Group
ME/4560/10
The OFT's decision on reference under section 22(1) given on 14 September
2010. Full text of decision published 11 October 2010.
Please note that the square brackets indicate figures or text which have been
deleted or replaced in ranges at the request of the parties or third parties for
reasons of commercial confidentiality
PARTIES
1. General Healthcare Group Holding Partnership LLP (GHG) is a provider of
independent healthcare services in the UK. GHG operates two primary
businesses: BMI Healthcare Limited (BMI), which operates 60 acute care
private hospitals; and Netcare Healthcare (UK) Limited, which provides
specialised clinical services to patients under contract to the NHS.
2. Covenant Healthcare Group (Covenant) comprised Transform Holdco
Limited (Transform), which provides cosmetic surgery, and non- surgical
cosmetic treatments across the UK from a network of clinics, and other
venues and two Transform owned and operated hospitals; and Abbey
hospitals which owned and operated five private hospitals in North West
England and Scotland as well as the London Churchill Clinic. However both
the London Churchill Clinic and Abbey Caldew hospital in Carlisle were sold
prior to the GHG transaction. Covenant's turnover (including the London
Churchill and Abbey Caldew hospital) in the financial year to 30 September
2009 was approximately £65.8 million.
TRANSACTION
3. GHG, Covenant and the Bank of Scotland plc (the Bank) agreed to a sale
and restructuring of certain divisions of Covenant that resulted in GHG
1
purchasing Abbey Hospitals (Holdings) Ltd and its subsidiaries and shares
equivalent to 42.5 per cent of the issued share capital of Transform. The
Abbey transaction is structured as an asset purchase while the Transform
purchase is structured as a share purchase.
4. Under the terms of the agreement GHG has purchased the business of the
Abbey Hospitals for a consideration of [ ], via BMI. Abbey Propco was
established, in which the Bank and its joint venture partner, Prestbury,
together own 100 per cent of the shares. GHG has entered into long leases
with Abbey Propco. Transform Newco was established with the Bank,
Cognetas (previous controlling shareholder of Covenant) GHG and the
Management holding [ ] per cent, [ ] per cent, [ ] per cent and [ ] per cent
of the shares respectively.
5. At the date of the transaction Abbey owned and operated four private
hospitals, namely:
• Abbey Kings Park, Stirling, Scotland
• Abbey Carrick Glen, Ayr, Scotland
• Abbey Sefton, Liverpool, England
• Abbey Gisburne, Clitheroe, England.
While Transform owned and operated from a network of 19 clinics across
the UK, in England its surgical operations were carried out at two
Transform-owned and operated hospitals, Pines, in Manchester, and
Riverside, in Brentford, both of which are dedicated to the provision of
cosmetic surgery, while in Scotland its surgical operations were carried out
at Abbey Kings Park and Abbey Carrick Glen hospitals.
6. The transaction completed on 28 May 2010; the parties notified the
transaction on 24 June 2010; the extended administrative deadline for a
decision is 27 August; and the statutory deadline expires on 27 September
2010.
JURISDICTION
7. As a result of this transaction, GHG, the four Abbey Hospitals and
Transform have ceased to be distinct.1 The parties overlap in the supply of
1 GHG's shareholding of 42.5 per cent in Transform gives it de facto control over Transform.
2
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