Spire Healthcare reveals IPO range at 210p to 300p

Spire Healthcare, which aims to be the first British private hospital chain to float on the London Stock Exchange, has revealed its initial public offering price range at 210p to 300p per share, valuing the company at up to £1.12bn.

Spire, which runs 39 hospitals and 13 clinics in the UK, is hoping to raise gross proceeds of £315m through new shares. The final pricing is expected to be announced around July 18.

Rob Roger, chief executive of Spire, said: "We are pleased with the level of investor interest we're seeing at this stage of the IPO process. We believe the dynamics of the UK healthcare market are strong and will strengthen further given the growing UK population and increasing life expectancy."

Spire announced its intention to float on the London Stock Exchange in June. The money raised will be used to pay off debts and cover the listing cost as well as priming the group for further expansion as it seeks to capitalise on the ageing population and a growth in opportunities to provide NHS services.

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Spire was formed in 2007 and has expanded through the acquisition of Classic Hospitals, the Thames Valley Hospital and the London Fertility Clinic. Last year, it raised about £700m through a sale and leaseback of 12 of its hospitals to pay down debt and fund new investment.

Bank of America Merrill Lynch, Morgan Stanley, JPMorgan and Numis Securities are overseeing the flotation process, which would represent the second major healthcare listing of 2014, after GI Partners' IPO of Cambian Group and Advanced Childcare.

Vernon Baxter, managing director of Healthcare Investor, a research publication, said: "It's very encouraging that public markets appear to be open again for healthcare services - with Spire following hot on the heels of Cambian Group.

"But it is also appears clear that Spire is taking the public route because major private equity houses - many of which looked closely at this - are struggling to justify multiples greater than 8-9 times for a business of this scale."

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Mr Baxter said investors could be wary of the scale of the price range - between 210p and 300p - at which the shares are expected to be sold. It values the company at anything between £786m and £1.12bn.

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