Virgin enters healthcare market with Assura deal
VIRGIN has entered the healthcare market with its £4m acquisition of a majority stake in Assura’s GP business.
The conglomerate has bought the 75.1% majority stake in Assura Medical through the newly created Virgin Healthcare Holdings.
Warrington-based Assura will retain the minority shareholding and appoint chief executive Richard Burrell to the board of Virgin Healthcare.
The healthcare and property company announced its intention to split the business – where Assura partners with groups of GPs to form joint venture provider organisations – from the rest of the group, last year.
The £4m has been issued to Assura as an interest free loan note, to be re-invested in the business, in return for Assura retaining a 24.9% stake in Virgin Healthcare. However, all future funding for the company will come from Virgin.
A total of 75 staff will transfer with Assura Medical to Virgin.
Richard Burrell, chief executive of Assura, added: “With its strong brand and financial position, Virgin is the ideal organisation to take Assura Medical’s business to the next stage of its development.
“Assura will preserve the upside to the business through its 25% stake, whilst focussing its activities on its profitable property and pharmacy businesses, capable of paying attractive dividends.”
Virgin’s Sir Richard Branson said: “Healthcare is a sector that the Virgin Group has been extremely interested in entering for some time but we have always said that the partner and the timing had to be right – with Assura we believe we have found the perfect partner.
“The Assura Medical business is underpinned by a passion for patients, a strong focus for delivering quality and safe health outcomes and a commitment to work in partnership with those who deliver healthcare.”
Assura Medical’s 30 GPCos represent partnerships with over 1,500 GPs. They provide a range of primary and intermediate community-based NHS services, including outpatient services, diagnostic procedures, day care surgery and GP-led health centres.
In the six months to September 30, 2009, Assura Medical incurred a pre-tax loss of £4.4m on a turnover of £100,000. The net assets of Assura Medical upon completion of the sale to Virgin will be around £13m.
Assura said the transaction and other cost-cutting measures would allow it to resume dividend payments in 2010/11.
The company also reiterated that takeover talks for the core business were still ongoing.
