BBGI ups exposure to healthcare

The London-listed fund has invested £9.1m in three UK hospitals, following on the acquisition spree it started earlier this year.

Bilfinger Berger Global Infrastructure, the listed arm of German developer Bilfinger Berger, has bought £9.1 million (€10.9 million; $14.7 million) worth of equity and subordinated debt in healthcare assets held by UK property firm Assura Group.

The interests comprise stakes in two existing projects, Liverpool & Sefton Clinics and North London Estates Partnerships, as well as a stake in Mersey Care Mental Health Hospital, in which BBGI already held an indirect holding through former investments.

Under the agreement, BBGI will acquire 20 percent of the equity interest in Liverpool & Sefton and 26.1 percent of the subordinated debt. The firm will own 46.6 percent of the equity and 52.8 percent of the subordinated debt on completion of the transaction.

The deal will also see BBGI control 46.6 percent of the equity and 53.3 percent of the subordinated debt of North London Estates Partnerships, as well as 66.7 percent and 70 percent of the equity and junior debt of Mersey Care Mental Health Hospital, once the acquisition is acted.

Both the Liverpool & Sefton and North London Estates projects are concessions to develop, fund, build, operate and manage primary healthcare facilities in the UK. The Mersey Care project involves converting Liverpool’s former Walton Hospital site into a new, 85 bed, mental health in-patient facility.

The transaction remains conditional on BBGI raising funding and gathering consent from counterparties, which include other shareholders in the projects.

It follows the firm’s successful fundraising round in July, when BBGI topped up its existing capital pool with £85 million – in excess of its original £70 million target. The proceeds were allocated to the purchase of one road and one social accommodation project in Canada.

BBGI has since acquired Kelowna Vernon Hospitals and North East Stoney Trail, both located in Canada, for £25.9 million, and bought four projects in Germany from construction company Hochtief in August for £11.4 million.

The firm entered in exclusive negotiations with German parent group Bilfinger Berger to acquire up to 11 projects last October. It eyes a fresh fundraise on the public markets during the last quarter of 2013 to finance the acquisition, which could be worth around £200 million (€238 million; $324 million).