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CINven set to seal pounds 1bn heathcare deal

Wednesday 16 April 1997 18:02 EDT
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CINven, the venture capital group hived off from British Coal, is holding exclusive talks with the French industrial conglomerate, Compagnie Generale des Eaux (CGE), which could result in a pounds 1bn management buyout of its healthcare divisions in the UK and France, writes Chris Godsmark.

The deal, financed with a mixture of debt and equity, is easily the largest since CINven was separated from British Coal 18 months ago. It follows its financing of the management buyout of the Compass catering group's healthcare arm for pounds 180m in 1995. CINven is though to have beat off stiff competition for the bid, which could be sealed by the summer.

The announcement is another significant boost for the venture capital industry, which has come under the spotlight following deals to sell two privatised railway rolling stock leasing companies over the past year. Managers and venture capital backers emerged with hundreds of millions of pounds in windfall profits less than a year after the state sell-off.

CGE has already stated it expects to receive around Fr8.5bn (pounds 900m) from the sale, which includes private hospitals in the UK through its General Healthcare company and its French operation, Generale de Sante. The sale will raise speculation that the businesses will be floated on the stock market.

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