Circle Health is looking to acquire the UK’s largest private hospital group, BMI Healthcare, in a deal which will turn the much smaller company into one of the leading players in the UK market.

Toscafund, along with private equity company Penta Capital, acquired Circle in 2017 for a reported £69 million at which point the company was delisted from the Alternative Investment Market.

Circle, currently operates just two private hospitals in the UK with a third in the pipeline. It also provides musculoskeletal services to the NHS and has started on an international expansion route, opening two clinics in China. The group’s management team is regarded highly in the industry and the company has won a string of awards including Private Hospital Group of the Year.

BMI Healthcare operates 54 hospitals in the UK but was heavily in debt to the tune of £1.7 billion in 2018 and has suffered in recent years from declining NHS referrals and private medical insurance work and rising rents. In 2018 it was taken over by a consortium of its landlords after the majority shareholder, South African company Netcare, sold its holding. In a bid to cut costs, BMI closed four hospitals in 2019.

BMI reported a loss of £56,886,000 against a gross profit of £456,819,000 for the 18 months to 31 March 2018.