Morgan Sindall Group plc today announces that its Investments division, Morgan Sindall Investments Limited (‘MSIL’), has sold its NHS LIFT and medical properties investment interests in Community Solutions Investment Partners Limited (‘CSIP’) and CSPC 3PD Limited (‘CSPC 3PD’) and has acquired the 50% shareholding in Community Solutions Management Services Limited (‘CSMS’) held by its joint-venture partner, Barclays European Infrastructure Fund II LP (‘BEIF II’). The total consideration received by the Company is £23.9m.
MSIL has sold its shares in CSIP to Equitix Healthcare 2 Limited (‘Equitix’) and its shares in CSPC 3PD to MedicX Properties VII Limited (‘MedicX’), a subsidiary of MedicX Fund Limited.
The cash consideration received on completion is above the directors’ current valuation for the investments and represents a valuation discount rate on the future cash flows within the Group’s range for such rates of 7-9%. For the year ended 31 December 2011, the investments contributed £1.2m in operating profit and had a book value of £11.7m.
The disposals are in line with the Group’s strategy of realising investments as they mature, in order to redeploy capital into new projects. The Group continues to see investment potential within the health sector and will retain an interest in CSIP providing the opportunity to invest jointly with Equitix in new developments created by CSIP.
Following the transaction, MSIL will wholly own CSMS, which will continue to provide the management services to CSIP’s investments under existing management service agreements.
Paul Smith, Chief Executive, commented “These transactions enable the Group to recycle its capital into other developing markets and investment opportunities, whilst at the same time providing the opportunity to work with Equitix on new healthcare developments in the future.”
CSIP is an active investor in community based health, social and local authority services; providing development solutions in partnership with NHS Primary Care Trusts, Local Authorities, independent primary care contractors and other community stakeholders. CSIP is currently the private sector partner in 8 NHS LIFT areas and has developed a portfolio of 36 buildings extending to circa 75,000 sqm since its creation in 2002. It was a 50/50 joint venture between MSIL and BEIF II, which has also sold its interest to Equitix..