Real estate merger to form biggest ever UK healthcare property investor

Real estate group Primary Health Properties (PHP) has agreed a £1bn merger deal with MedicX in a move that is set to create the UK’s largest ever UK healthcare property investor.

In an effort to scale up its role within the healthcare asset market, FTSE 250 primary care specialist PHP has signed an all-share merger with MedicX that will give the group a combined portfolio of almost 500 properties valued at £2.3bn.

PHP investors will own 69 per cent of the combined firm, with the remainder being held by MedicX shareholders.

Hargreaves Lansdown equity analysts Nicholas Hyett said that the price of the deal was more immediately favourable to MedicX shareholders than PHP investors, but “in the long run we think it makes sense for all involved”.

Hyett added: “PHP and MedicX both own and rent community healthcare facilities – particularly GP surgeries – in the UK and Ireland. This merger is all about scale, and the benefits that come with it. The most obvious benefits are £4m in cost savings – largely achieved by consolidating the property management contract under one roof, with some smaller cost savings round the edges.”

PHP managing director Harry Hyman told Morning Wire: “We have managed to pull this off in a very cost effective way and the timing is right. With the new NHS 10-year plan there is a willingness to sanction more primary care investment in the UK, so the market opportunity is fantastic.”