US private equity firm Bain Capital has recently acquired an 80 per cent stake in blood products company Plasma Resources UK for £230 million.
Plasma Resources UK (PRUK) is the top company in a group which includes Bio Products Laboratory Limited and DCI Biologicals Inc, a US based plasma supply company.
The group supplies its clients (including the NHS) with life-saving treatments for haemophilia and immune deficiencies via a range of blood products manufactured in the UK and plasma imported from the US.
Opposition to the sale arose in the form of former Labour Health Minister Lord Owen who called the sale “extraordinary”. Lord Owen went on to state:
“Remember this [PRUK] was bought by the Labour government in 2002, because of the danger to contamination of blood supplies by CJD…and it was bought for the NHS and owned by the NHS. This is being sold to private equity capital – this is not a public company with shareholders and public responsibilities and answerability”.
Lord Owen’s comments may come as a surprise to some people given his previous role on the advisory board of private equity firm Terra Firma Capital Partners, whose most recent investment included the £825 million acquisition of care home provider Four Seasons.
A Department of Health spokesperson commented that the sale was “good news for patient safety, tax payers and jobs”. Bio Products Laboratory Limited has already seen one of its manufacturing plants shut in the last six years and without further investment in the business there were concerns with regards to its plant in Elstree, Hertfordshire.
Bain Capital has agreed to invest £50 million and has ambitions to turn PRUK into “a UK-based life sciences champion” and expand the company’s international reach.
It is also worth noting that the Department of Health retains a 20 per cent stake in PRUK and also holds a seat on the board.
So what does all this mean? The UK healthcare model is world renowned and one that other countries are seeking to emulate. The acquisition by Bain Capital continues a long running trend, which has emerged since the recession, of foreign owned buyers (whether private equity or trade) acquiring good quality healthcare businesses in the UK.
Savvy investors can see the opportunity of acquiring established businesses in the UK, scaling them up and exporting the services to other parts of the world, opening up previously untapped revenue streams.