Ramsey Healthcare’s Acquisition of Elysium Healthcare
Deal Overview
Acquirer: Ramsey Healthcare
Target: Elysium Healthcare
Total Transaction Size: £775 Million ($1.4 Billion)
Close Date: 31st January 2022
Company Details: Acquirer - Ramsey Healthcare
Founded: 1964
CEO: Nick Costa
Ramsey Healthcare is an Australian-headquartered global private healthcare company with a strong presence in Europe and Australia, with an approximate market capitalisation at the time of sale of £7 billion (A$14.6 billion). They operate over 480 hospitals and day surgery facilities across 11 different countries in three continents. They operate in both health-related medical procedures working with public sector national health agency patients, as well as private and cosmetic medical practices. Ramsey’s key selling point is that they operate an exceptionally high-quality standard of care, with 97% of their facilities being rated “good” in the UK by the Care Quality Commission. This coincides with their values of being progressive, caring, and ‘for the people’. This is encompassed in their ethos of ‘caring for people, caring for the community, and caring for the planet.’ A further way they stand out which may lead to such a highly satisfactory rating is that they operate a decentralised management structure whereby decision-making powers are distributed amongst the organisations. This can link to the high satisfaction rating as it ensures that fundamental decisions that impact patients receive contributions from the staff that see problems and opportunities for growth first-hand which means they are more likely to be effectively remedied.
Ramsey remains progressive, focusing on recent expansions in the mental health sector, improving sustainability and care for vulnerable people. Their women’s-only clinic in Australia specialises in providing care for women of trauma, often victims of sexual, domestic, or family violence. They have now adapted their focus to account for political and sector-based changes to allow for a wider class of issues faced by women to be treated. Ramsey Healthcare remains passionate about progression and high social utility.
Company Details: Target - Elysium Healthcare
Founded: 2016
CEO: Joy Chamberlain
Prior to this acquisition, Elysium Healthcare was owned by private equity firm BC Partners. This followed BC Partners having formed Elysium Healthcare in 2016 following their acquisition of 22 Priory and Partnerships in Care hospitals from Acadia Healthcare for a sum of £320 million. At the time of the sale to Ramsey Healthcare, they were estimated to be worth approximately £750m-£900m. Elysium are a UK-based private healthcare provider that focuses on specialist care mainly covering 4 key divisions: mental health and wellbeing, learning disabilities and autism, specialist neurological care following brain and spinal cord injuries, and children and education. The business was originally formed with 22 hospitals and has since grown to 90 and over 2000 beds through a range of acquisitions. Elysium has a particular focus on being a high-quality healthcare provider with over 82% of services inspected by CQC achieving either an ‘outstanding’ or ‘good’ rating. They also take pride in being innovative having proactively launched an award-winning international nursing programme to tackle staff shortages, bringing promising nurses from overseas to be recruited by Elysium. This initiative has proven highly successful, with 211 out of 500 of these nurses going on to achieve promotions within 5 years, and a qualification pass rate of 100% within two attempts. They also work in partnership with NHS services through commission agreements with local government authorities.
Elysium Healthcare has however faced struggles, with an inquest jury in 2019 finding the service contributed to the death of 19-year-old Brooke Martin. Brooke suffered from autism and emotionally unstable personality disorder, where she was detained at Chadwick Lodge Hospital. She passed having suspended herself from a ligature in her hospital bedroom just 5 days after she had previously attempted the same act without a sufficient risk assessment procedure picking up on this. The inquest found serious failures in risk assessments, communication levels, and observations led to this tragic event. This however was not the last instance of struggles and further inquests were faced by Elysium for the deaths of 16-year-old Nadia Shah and 19-year-old Leon Tasi in Elysium facilities by suspension from a ligature, with Leon Tasi even being at the same facility at Chadwick Lodge Hospital in Milton Keynes as Brooke Martin. These inquests all found some form of negligence such as delayed observational issues, access to ligatures, a failure to use far safer simpler measures (such as a door pressure sensor to reduce ligature suicides by ligature), or issues related to basic life support and response.
The Acquisition
In February 2022 Ramsey Healthcare made their entry into the UK private mental health sector with their acquisition of Elysium Healthcare. Ramsey Healthcare likely wished to develop and strengthen its position in the European and UK mental health market and enabled them to strengthen their relationship with the NHS, capitalize on vast growing demand and diversify their services in a country they are familiar with. Furthermore, with existing synergies between Elysium Healthcare and other mental health facilities ran by Ramsey Healthcare such as France and Sweden which lead to the then-managing director, Craig McNally, to state that it is, “an attractive and compatible opportunity for Ramsey to expand into the UK health market and grow integrated patient pathways.” He further described Ramsey and Elysium as a ‘natural fit’ with a shared focus on ‘operational excellence and employing industry-leading talent’. BC Partners would be motivated by the sale as they had achieved their aim as a private equity firm of making a significant return on investment since their £320 million acquisition from Acadia Healthcare, thus the sale was expected in being a private equity firm whose purpose is to make profits from purchasing, developing and then ultimately selling companies.
This strategic acquisition intended to place them in the quickly developing UK mental health market, which was expanding at a rate of 4% a year and an estimated worth of over £15 billion. This deal therefore also formed part of a wider expansion strategy by Ramsey Healthcare following a $1.5 billion syndicated sustainability and impact-linked loan from HSBC. This type of loan is where the borrower’s interest rates are subject to impact performance, meaning if they meet a certain utility-based objective they will pay back a reduced interest rate. These types of loans are generally well regarded however carry risks to the borrow such as to their reputation if they fail to meet the target. This is specifically significant as these types of loan almost universally require a degree of public disclosure. This deal was therefore beneficial to Ramsey in satisfying the specified performance to achieve the reduced interest rates of their sustainability-linked loan and played a major component in additional motivations for the acquisition. This high-risk deal formed part of Ramsey Healthcare’s long-term commitment to social utility and impact, mental health work and global expansion.
Points of Consideration
This acquisition came after the launch of the Ramsey Care sustainability strategy. Ramsey’s mission was to care for people, the planet, and communities that may be affected by the operations of Ramsey. To implement this strategy Ramsey secured a $1.5 billion loan financing agreement through a syndicated sustainability-linked loan (SLL) with HSBC. This is a major loan being both the first sustainability-linked loan issued by an Australian healthcare company and the largest corporate syndicated SLL in Asia Pacific. This type of agreement meant that if Ramsey fulfils their sustainability environmental and people-centred goals (such as expansion into mental health services) they will pay a reduced interest rate back on the loan.
The first point of legal contention faced by Ramsey was needing to ensure that regulation and compliance was in check following the string of inquests prior to the acquisition. Many Elysium-related inquests were still ongoing, with some being settled and others having opened since the deal yet occurred before the acquisition took place. This increases the need for Ramsey to ensure they complete due diligence and adequate risk assessment amidst CQC inspections and jury hearings. This would be a complex point of legal contention as to the value (both purely financially and in reputation) that these cases and inquests would have on Elysium. Ramsey would need to ensure that they are complying with the CQC standards to avoid further inquests and liability. These place requirements such as having on sufficiently competent and experienced staffing and good governance systems of care. The most applicable of these would be the fundamental standards of safe premises and equipment as well as a duty of care to prevent a risk of harm that could be avoided. Given the previous inquests findings that door pressure sensors greatly reduce the possibility of ligature related deaths (and should have been used) it would have been imperative equipment like this would be utilised as quickly as possible.
This sourced with risk assessments and addressing inadequate staffing issues were all largely significant to achieve both legal compliance and restore public faith and reputation. This can be regarded as having been successfully achieved thus far with no instances of negligent patient deaths being reported since the acquisition. The direct implications of this successful compliance is that revenue is likely to increase as with restored reputation carries the expectation of restoring consumer faith and thus patients. Whilst an argument may be put forward that this would also increase costs in implementing more stringent safety equipment and more rigorous training this may be offset by reduced legal fees and damages paid out related to where negligence occurs resultingly.
Secondly, this deal needed to gain approval from the governing UK regulatory healthcare bodies to ensure compliance with competition law. This is a type of law aimed at preventing monopoly and dominance of a business abusing their vast market share. This area of law is highly prominent in mergers and acquisition deals as it must be ascertained that the deal would not be in breach of these regulations. This is regulated by the Competitions and Markets Authority (CMA). This is particularly prominent as Acadia, the company that sold 22 Priory and Partnerships in Care, the companies that were put together to form Elysium, were themselves mandated to do this in a CMA carve-out due to their dominant position at the time in the UK mental health sector which led to the sale. Whilst Ramsey did not have a specific market share in the UK mental health market prior to this acquisition they did have a strong presence nonetheless as a private health provider working in partnership with the NHS. This legal advice was led by international firm DLA Piper primarily in their Leeds office with work also done in their London and Luxemburg offices, with Elysium being advised by Kirkland & Ellis as well as by Travers Smith. Despite fears and concerns, these complexities governing competition law were smoothed out without a review by the UK’s Competition and Markets Authority.
Future Developments
Following the £775 million deal being completed on 1st February of 2025 Ramsey has continued to aggressively enter the UK mental health market with their UK subsidiary Elysium Healthcare recently acquiring Vivre Care, a specialist eating disorder service provider to align with its NHS strategy of prioritising community-based treatment and tackling community problems.
Joy Chamberlain who co-founded Elysium in 2016 has since stepped down as CEO of Elysium Healthcare in February 2025 with Nick Costa (Ramsey UK CEO) taking the role during the interim. This may cause a period of adjustment, yet no doubt Costa is equipped for the role and will find another suitable candidate. This adjustment period may see some managerial differences with Costa’s lack of directly applicable experience as Ramsey does not specialise in mental health services whilst Chamberlain had extensive experience in the sector with Elysium. However, Costa has proven successful in other areas with Ramsey in the UK and has worked alongside Chamberlain so the period will likely be no reason for concern.
Despite this aggressive attempt at expansion, Ramsey has announced that they no longer expect to report profits in the financial year beginning in April 2025, after recognising a $291 million impairment in their UK operations. This is a surprise after Ramsey stated in November 2024that they expected to operate highly profitably, however as stated by Natalie Davis, Group CEO and MD, they attribute this change to “continued occupancy challenges in mental health and rehabilitation services, as well as slower than planned occupancy at new sites”. These occupancy challenges may impact the revenue that Ramsey and Elysium under Ramsey are able to generate. Ramsey also attributed some of their struggles to the 30% UK living wage increases since they finalised their Elysium acquisition. This drastically increased national minimum living wage which drives up costs of hiring staff and receiving goods by supply chains due to outgoings for production companies being higher, and with the highest percentage increase across a 3-year period since the national living wage was introduced it is understandable how this may impact profitability.