( FT )- Spire Healthcare, formerly known as Bupa Hospitals, has agreed to buy Classic Hospitals Group, the UK's sixth-largest private acute hospital operator, for ?145m.
Classic Hospitals Group, owned by private equity firm LGV Capital, operates 10 private acute hospitals, which together have about 370 beds and more than 2,000 staff.
Bupa Hospitals changed its name to Spire Healthcare after it was bought for ?1.44bn by the private equity group Cinven last June.
Healthcare has proved an attractive area for the private equity industry which over the past four years has become increasingly exposed to the sector.
Analysts say groups including Germany's Allianz Capital Partners and Blackstone, the US buy-out firm, have been drawn to the sector because of its power to generate cash, growth opportunities offered by an ageing population and prospects for further consolidation.
Additionally, healthcare companies are often property backed, which is helpful for winning bank debt support.
Cinven is now the UK's third-largest provider of private medical services, with a strong portfolio of European healthcare investments, which include Partnerships in Care, an independent UK provider.
The Bupa deal put an end to concerns about conflicts of interest at Bupa as both buyer and seller of healthcare services in the UK.
But it also raised questions about whether Cinven would be as keen to attract National Health Service patients as Bupa Hospitals had been.
Last July, Cinven announced a EU675m (?508m) leveraged buy-out of USP Hospitales .
The company is the second-largest private healthcare provider in the Spanish market, focused on long-stay tourists and pensioners in holiday homes.
Elderly residential care, one of the most popular deal areas, is largely privately owned. The number of over-85s is set to double between now and 2050.