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(Reuters) - Australia's Ramsay Health Care Ltd said on Monday it would buy Britain's Elysium Healthcare Ltd for 775 million pounds ($1.03 billion) as it looks to expand its presence in mental healthcare services.
The COVID-19 pandemic has put an even larger spotlight on mental health as lockdowns take a toll on people's wellbeing. With greater acceptance and less stigma, demand for mental health services has started to outstrip supply.
The British government plans to increase spending on mental health services by 2.3 billion pounds a year by 2023-2024.
"The acquisition of Elysium will expand Ramsay's patient pathways into the 15 billion pound UK mental health market at a time when more and more people are seeking support for mental health, learning difficulties and neurological issues," Ramsay Chief Executive Officer Craig McNally said in a statement.
Apart from adding 72 sites to its portfolio, the deal will allow the Australian hospital operator to further build on Elysium's relationship with the state-run National Health Services.
The acquisition of Elysium, which is owned by private equity firm BC Partners, is expected to add to Ramsay's fiscal 2023 earnings in the mid-single digits and provide savings of 5 million pounds a year.
The British firm had reported revenue of 349 million pounds for the 12 months to June this year. It did not immediately respond to a request for comment.
For Ramsay, the deal came five months after it failed in its 1.04 billion pound attempt to buy Spire Healthcare after it was blocked by some shareholders of the British firm.
($1 = 0.7555 pounds)
(Reporting by Arundhati Dutta and Nikhil Kurian Nainan in Bengaluru; Editing by Daniel Wallis, Peter Cooney and Subhranshu Sahu)