The deal involves two private equity firms: LGV Capital, the vendor of Classic Hospitals, and Cinven, which owns Spire.

LGV launched Classic Hospitals in July 2005, when it acquired nine hospitals from healthcare group BUPA for £85 million. A tenth hospital was added a year later when Classic Hospitals purchased Lourdes Hospital in Liverpool from a religious order.

Cinven acquired a further 25 hospitals from BUPA for £1.4 billion in August 2007, following the group’s decision to focus more closely on its core business of health insurance.

Michael O’Donnell, managing director of LGV, describes the firm’s purchase of Classic Hospitals as ‘complex and challenging’. The business retained strong ties with BUPA through a transitional services agreement, while LGV assembled an independent management team to launch the Classic Hospitals brand.

Since the acquisition, £23 million has been spent on updating the existing facilities. Revenues increased by 19 per cent to £94 million last year.

Part of financial services group Legal & General, LGV Capital operates in the UK mid-market and specialises in buy-outs and buy-ins, typically with an enterprise value of more than £50 million. It invests in the leisure, healthcare, services and consumer products sectors.

Established in 1977, Cinven focuses on large European buy-outs. Its minimum investment is €100 million (£75 million).