A slightly delayed October roundup as we take stock on recent political decisions & the potential impact on the global economy.

This month's Last Word is by Giles Johnson, Managing Director of CIL Management Consultants

For day-to-day updates in the UK Healthcare and Education sector, follow us on twitter @Nexus_CF

Recent M&A activity

Healthcare

• Bupa acquired The Links and The Lindsay care homes in Poole from Primetower Properties.

• Endless LLP has acquired Newcastle-based WHP Facilities, a desinger and insaller of sterile processing environments for laboratories.

• Audley Retirement has acquired Red Kite Home Care, with 22 carers transfering into Audley Retirement's care are - Audley Care

• BC Partners to acquire the Acadia Healthcare portfolio of 22 mental health facilities (a mix of Priory Group and Partnerships in Care assets), subject to approval by the CMA

• Premier Research, a mid-market contract research organisation has secured growth investment from Metalmark Capital, a NY-based PE firm.

• Octopus Healthcare have acquired 3 care homes from Apache Capital, based in Bisley, Canterbury and Gerrard's Cross.

• Moorfields Pharmaceuticals has been acquired by Rayner Pharmaceuticals, with staff continuing to be based in London.

• Primary Health Properties has acquired it's first Irish primary care centre in Tipperary for €6.7 million.

• Lone Star has acquired Quercus Healthcare Fund.

• Tracscare has bought acquired brain injury provider New Bridges, which operates 4 residential homes and provides outreach services in the South-West.

• Spirit Healthcare has acquired Cambridge-based medical wearable tech company Aseptika.

• AIM-liseted Cyprotex plc is to be acquired by Frankfurt-listed Evotec AG for £55.4m.

• Doctify has completed their series A funding, which was led by Amadeus Capital Partners.

• Care home operator ACH Group has been merged with The Regard Partnership, a LD, barin injury and mental health care specialist.

Education

• Unite Group has acquired a £35 million student accomodation development site in Sheffield.

• Asquith Nurseries have acquired Kids2Us, their 12th acquisition of 2016, bringing total sites to 95.

• Bridgepoint Development Capital has acquired Inspiring Learning for c.£100m

Last Word

This month's Last Word is by Giles Johnson, Managing Director of CIL Management Consultants.

More people, more illnesses, more treatments but no more money, staff or buildings. The demand over-hang across the UK’s health and social care economy seems to be back where it was when New Labour came to power to the chorus ‘Things Can Only Get Better’ in 1997. In his 2002 budget, Gordon Brown started a prolonged period of investment in the NHS and, given that the fiscal cycle lags the economic cycle, the weight of investment carried us a long way – to very recently. The debate at the time was around the % of GDP the UK spends on healthcare relative to comparators. That metric is slipping again.

Investing into a sector where there is more demand than supply is a good investment formula. As long as that excess demand can be funded. And there’s the rub. In the words of Liam Byrne as Labour slipped out of office 13 years later “I’m afraid there is no money – good luck”. So now the country has to adjust to a more openly mixed healthcare economy, not just in terms of supply, but in terms of funding.

Brexit and Trump are keeping an honest debate about this, about the rationing of publicly funded services, off the front pages. It’s a continuous and rather boring story anyway. Productivity as a solution? Prison officers have had enough of that. So have head teachers and junior doctors. Nurses increasingly prefer to work through agencies. Let’s give STP’s a go, reconfiguring what we have. Meanwhile private capital sponsors the introduction of new treatments such as proton beam therapy.

Independent sector businesses and their investors should be clear about the part they play in this wider narrative. Solving systemic inefficiencies is fine as long as at least some of the gain is passed back to the customer. There is plenty to go for there and little by way of capex to refresh state-owned capacity. But developing mixed funding streams seems a more enduring source of growth. What is wrong with citizens buying healthcare anyway? Or topping up and upgrading? We can buy and top-up so much else. I think I know what Liam Byrne would say. At least he was honest.

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