“We know we can bring efficiencies to a network,” Miller said.
The deal had been rumored for a couple weeks. Frank Morgan, an analyst at RBC Capital Markets, said in a research note the Cygnet acquisition is attractive for UHS because the U.K. healthcare market is ripe for private investment. Acadia Healthcare, which competes with UHS in the behavioral-health market, bought a U.K.-based psychiatric hospital operator this summer for $660 million.
“It would provide an initial entry point into the U.K. market for UHS,” Morgan wrote. “The U.K. market remains very fragmented, providing strong opportunities for well-capitalized operators to consolidate.”
Miller said UHS will look for more deals in the U.K. now that it has Cygnet as a base.
“Where we see opportunity—where we can grow at a reasonable price with high quality—we're interested,” Miller said.
UHS owns or operates 195 behavioral health hospitals and 24 acute-care hospitals throughout the U.S., Puerto Rico and the U.S. Virgin Islands, as of June 30. The company is on pace for about $8 billion in revenue this year. Its stock is up almost 37% since the beginning of the year, trading at $110.83.
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