British healthcare group Bupa has 200-300 million pounds for acquisitions in 2015

Healthcare firm Bupa has 200-300 million pounds for acquisitions
Financing constraints mean British private healthcare group Bupa [BUPAI.UL] only has around 200-300 million pounds available for acquisition in 2015, its chief executive said on Monday.
The unlisted company made profits of 638 million pounds last year and would come in at around 50-60th position in the FTSE-100 if it were a listed company, Stuart Fletcher told Reuters in an interview.
Bupa, set up in 1947 just ahead of the formation of Britain's national health service to provide an alternative health provision, ploughs all its profits back into the business.
It has no plans for a listing. But with two billion pounds in outstanding debt, it would not want to risk its single-A credit rating by issuing more debt to fund expansion, Fletcher said.
"We have some headroom, and that headroom we are using, but it's relatively small — we are talking about 200-300 million pounds for this year."
Bupa has completed seven deals totalling 1.6 billion pounds in the past three years, including moving into new markets in Poland and Chile. Expansion in Peru was likely the next focus, Fletcher said.
The firm was making small "fill-in" acquisitions, rather than planning any major purchase, he added.
Bupa's most recent debt issue was a 350 million sterling bond due 2021 with a coupon of 3.375 percent, launched last year and currently trading at a yield of 2.5 percent [GB107530975=].
Fletcher said he was also cautious about going on a spending spree due to uncertainty about capital requirements ahead of new European Solvency II regulations for insurers, due to come into force in Jan 2016.
Bupa gets 70 percent of its revenue from health insurance but also operates hospitals, care homes and medical clinics in many of its international markets.
Its largest markets are Australia, Britain and Spain. But it has seen more opportunities in emerging markets, where it has been expanding in recent years.
"Given the growth prospects for the UK, Australia and Spain … we needed to find new avenues for growth," Fletcher said.
He said the firm finds cost savings in providing services such as care homes alongside insurance, and aims to develop both sides of the business in countries where it is currently only in one sector.