Capvest buyout of Mater Private backed by AIB

AIB has emerged as financial backer to UK private equity firm Capvest in its €350 million buyout of the Mater Private Hospital in central Dublin.

The bank also backed the takeover group led by businessman Brian Joyce which bought out the hospital for a total of €41.89 million in late 2000.

The sale of the hospital in April yielded a significant profit for that group, which had bought the hospital from the Sisters of Mercy.

New filings in the Companies Office show that AIB made two loans last month for a total of €274.5 million to Medacuico Ltd, a Capvest-controlled vehicle. This included senior loan facilities of €242.1 million and a second lien facility of €32.4 million.

Some of the money will be used to refinance debts already in the hospital.

The remainder of the consideration is believed to have been funded in equity from Capvest and the management, staff and consultants in the hospital.

Led by Cavan-born businessman Séamus Fitzpatrick, Capvest has a 57.5 per cent stake in the hospital after the buyout of Mr Joyce and his colleagues.

The current management team, led by chief executive Fergus Clancy, is understood to have taken a 27.5 per cent stake in the business in the Capvest deal.

The stake held by staff and consultants in the hospital remains unchanged at 15 per cent after the deal.

Staff and consultants at the hospital received a cash windfall of €3,000-€15,000 after the transaction, which was approved by the Competition Authority in May.

Mr Joyce's team comprised the directors brought in by the Mercy Order in 1990/91 to restructure and reorganise the hospital, then struggling with heavy debts.

It included former Hibernian chief executive Eamon Walsh, economist Dr Brendan Kearney and accountant John Murphy. Mark Moran and John Mooney from the hospital's management team were also involved.

This group assumed the hospital's debts of €13.96 million and agreed to pay the order €27.93 million over 20 years.

It opted for unlimited status last year, so recent figures for its financial performance are not available. However, previous filings show that the business booked profits of €29.1 million in the four years after the 2000 deal.

The group booked an unrealised surplus of €29.44 million in 2004 on a revaluation of its property at Eccles Street in Dublin, an exercise which brought the value of its land and buildings after depreciation to €57.15 million.