| LONDON, Sept 15
LONDON, Sept 15 A handful of buyout firms are
submitting indicative bids for mental-health specialist the
Priory Group, which seller Royal Bank of Scotland (RBS.L) hopes
could fetch about 1 billion pounds ($1.55 billion), people
familiar with the matter said.
Advent International, Bain Capital, Blackstone (BX.N) and
Cinven [CINV.UL] were all planning to submit non-binding bids by
Wednesday's deadline, the people said.
The Carlyle Group [CYL.UL] and KKR (KKR.N) have also
examined the business, sources have said, but it was unclear
whether they intend to lodge bids.
The private equity firms, RBS and the Priory all declined to
The Priory operates more than 50 hospitals, schools and care
homes in Britain. It is best known for treating celebrities
including "Britain's Got Talent" star Susan Boyle, Libertines
singer Pete Doherty, and comedienne Ruby Wax, who went on to
write a show about depression, dubbed "Live From the Priory".
It is being sold as RBS sheds non-core assets to slim its
unwieldy balance sheet.
Priory expects to generate earnings before interest, tax,
depreciation and amortisation (EBITDA) of about 95 million
pounds in the year to December, a source previously said.
Banks would be willing to lend about 5.5 times that amount,
the source said, leaving a private equity buyer to stump up
about 500 million pounds in equity.
The business is viewed as a strong performer with a good
management team, meaning a new private equity buyer may have
little more to add to the business and could need to target
lower returns, another source said.
Buyout firms usually target net returns of 20 to 25 percent,
but have been prepared recently to put in more equity and accept
lower returns for businesses they perceive to be low-risk.
(Editing by Louise Heavens)