M&A Shakes Up Madrid Healthcare Industry Post-Reform

M&A Shakes Up Madrid Healthcare Industry Post-Reform

M&A Shakes Up Madrid Healthcare Industry Post-Reform

Spain’s National Health System has undergone a major shake-up as the government pushes ahead with its austerity programme to cut the country’s deficit and fuel a return to economic growth.

Nearly seven billion euros have been slashed from central and regional health budgets in the last three years, and reforms have been implemented to promote hospital privatisations to raise funds for the state coffers. The country’s health and education purse strings are controlled by the autonomous regions, and many have already put state-owned hospitals out to tender.

Last month, after some legal hiccups, the Madrid regional government finalised the privatisation of six of its 20 public hospitals. There are also plans to privatise 27 of its 268 local health centres. The Madrid privatisations are expected to save around 500 million euros.

AN ATTRACTIVE ACQUISITION

The Spanish healthcare system enjoys the reputation of being one of the best in the world in terms of quality and efficiency, so the privatisation of its hospitals has become a lucrative business for private investment.

The country’s biggest private healthcare firm Capio Sanidad, owned by venture capital firm CVC, already manages various hospitals in Spain,  four of which are in Madrid. Capio was tipped as a potential bidder for one of the capital city’s  hospitals which have recently come under the hammer.

But finally there were three contenders in the ring: Spain’s Ribera Salud, the UK’s BUPA Sanitas and Hima-San Pablo, a private healthcare management group based in Puerto Rico.

The companies will take over the management of the six Madrid hospitals, which serve 1.6 million people at an annual cost of 750 million euros.

MORE HEALTH M&A IN THE CARDS

As Spain pushes ahead with the overhaul of its health system, management contracts for more hospitals and clinics will be up for grabs. The government is also keen to promote more public-private initiatives, an area where BUPA Sanitas is a pioneer.

Since 2009, the company has collaborated with the Valencian regional government by managing the health department of the suburb Manises. The health department’s responsibilities include the Manises Hospital, which provides healthcare services for 195,000 people. BUPA Sanitas recently fully acquired the hospital.

Last year, it chalked up its first public-private collaboration project with the Madrid administration, acquiring a 50 percent stake in the University Hospital of TorrejonFor BUPA Sanitas, public-private joint ventures are the model of the future!

For information on M&A in Spain’s healthcare industry, contact corporate law firm Argali Abogados.

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