Centric renews bid for Mount Carmel Hospital

Healthcare provider Centric Health has made a fresh approach to buy Mount Carmel Hospital in south Dublin, which went into liquidation in January.

It follows RAS Medical Group, the owner of the Park West Clinic in Dublin 12 and other health businesses, indicating its interest last week to the hospital’s liquidator RSM Farrell Grant Sparks.

Under any new owner, Mount Carmel will almost certainly not be a maternity hospital but will focus instead on offering other facilities to patients.

Consultants
The Centric plan is understood to envisage the hospital exiting maternity services and providing various other medical services, including its speciality and diagnostic services, as well as offering suites to consultants in St James's Hospital in Dublin where they can meet private clients.

Centric declined to comment when contacted.

In December 2013, Metric Capital Partners, a European private capital company, invested €20 million in Centric to help it expand its primary care and diagnostics business. Metric is understood not to be formally involved in the approach at this stage.

John Sinik, the founder and managing partner of Metric, sits on the board of Centric. If the Irish healthcare group proceeds to a formal bid, it is likely Metric will then emerge as one of its funders.

Sinik is a former managing partner of Towerbrook Partners, a multibillion fund best known for investing in Jimmy Choo. In 2010, Towerbrook made an approach to take over the Hermitage Hospital in Dublin which did not proceed.

Centric previously made an offer to acquire Mount Carmel before Christmas from the National Asset Management Agency. Initially, this was accepted but, after due diligence, Centric reduced its price. Ultimately Nama did not secure a bid it found satisfactory, causing it to put the hospital into liquidation.

Prospective buyers prior to the liquidation were concerned about the cost of funding redundancies among the hospital’s 300 staff and about the expense of investing in the hospital to upgrade it and reorientate its offering away from maternity services. This caused buyers to fall away after 49 different parties initially expressed an interest in buying the hospital, which was founded in 1949.

Redundancies
As the hospital is now in liquidation and its 300 staff have been made redundant, the economics of keeping Mount Carmel open as a medical facility have changed fundamentally, making it more attractive to prospective bidders.

Despite the popularity of its maternity hospital in south Dublin, the reality is that demographics and Irish healthcare policy made its future unviable in this area.

At the time of Mount Carmel’s liquidation, the HSE ruled out taking over Mount Carmel. “The birth rate is declining and it doesn’t tie in with the HSE plan for maternity services to have a standalone maternity hospital,” he said.

Centric was founded in 2003 by Dr Maurice Cox and Dr Ray Power and employs 300 people in Ireland, Britain and Australia.