Case Study | Advent International

Healthcare

The Priory Group

www.priorygroup.com
Country United Kingdom
Sector Healthcare
Deal type Buyout
Investment date July 2008 (Craegmoor Group), March 2011 (The Priory Group)
Status Unrealized investment

Priory is the UK’s leading independent provider of integrated behavioral healthcare, specialist education and social care. The company treats over 70 conditions at its network of 275 facilities. Headquartered in London, Priory employs 11,000 people.

Advent International purchased Priory from the Royal Bank of Scotland in March 2011.

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POSITIONING PRIORY
FOR SUCCESS
IN A DYNAMIC INDUSTRY

As one of the UK’s premier healthcare providers, Priory had built a reputation for delivering high-quality services and outcomes. The company holds a unique competitive advantage through its experience and scale, resulting in development of innovative care pathways. These can accelerate recovery time for patients and deliver the best value for healthcare payers.

In assessing the investment, Advent saw Priory as a market leader in a recession-resistant industry with potential for long-term growth as the public sector reformed the way it provided services. Funding pressures meant that the UK’s National Health Service would have to innovate to support a growing population of people with behavioral health conditions.

“Our basic thesis was that the NHS would increasingly look for support from providers like Priory to deliver high-quality inpatient care,” said Tom Allen, a managing director at Advent in London. “We considered Priory, the market leader in self-pay behavioral health, to be ideally situated to become a partner of choice for NHS commissioners.”

Since the acquisition, we have moved quickly to help Priory strengthen its capabilities. The company has invested heavily in building its quality and compliance teams and is continually looking to improve treatment models. Further, to support organic growth and respond more effectively to customer needs, Priory has enhanced its sales, marketing and business development teams.
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CONSOLIDATING A FRAGMENTED MARKET

A key component of our value-creation plan was to consolidate the UK’s fragmented behavioral healthcare sector to create an integrated provider of health and social care. The first company Priory acquired, in April 2011, was Craegmoor, another specialized care services provider owned by Advent.

Already deep into our growth plan at Craegmoor, we saw that the business was a natural fit for Priory. The acquisition has supplemented Priory’s range of services and diversified its revenue base. By adding specialist learning disability and autism care (Craegmoor’s strengths) as a new division, Priory has extended its existing care pathways. Building on the success of this merger, we have supported Priory in making five further tuck-in acquisitions since 2011.

 

DRIVING BETTER PATIENT CARE AND FINANCIAL PERFORMANCE

Advent believes that Priory’s commercial success is built on delivering excellent care. The company’s financial and operational performance in recent years offers proof that the plan is working. Priory has achieved major improvements in Care Quality Commission ratings. As a result, revenue growth rates have been rising every year since our investment, and the company achieved record occupancy levels in 2014.

Priory’s CEO Tom Riall sees more growth ahead “as Priory and Advent continue working together to maximize the exciting opportunities before the company in the UK healthcare market.”

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