Occupational Health M&A Update

The UK occupational health market continues to see significant M&A activity, driven by a handful of key acquirers.

The sector remains fragmented, however, with a number of regional and niche operators creating opportunities for further consolidation.

This report outlines the current drivers of growth in the market, the most active acquirers, along with a summary of recent M&A activity.

A copy of the report can be downloaded here:

Occupational Health Market Overview

In simple terms, occupational health (OH) services deal with the effects of work on people’s health
There is a significant variation in occupational health provision offered by employers, with large organisations five times more likely to utilise OH services than SMEs
This has prompted growth in the offering of bespoke and ‘pay as you go’ options to SMEs, alongside remote delivery of these services to further boost accessibility
With an estimated 1.8 million work-related ill health cases in 2021/22, the occupational health market is in a unique position to positively impact employees’ experiences in the workplace, by developing policies that prioritise health and wellbeing
As a result, OH professionals are in high demand
However, the sector faces staffing difficulties, with 44% of private OH providers having job roles they are unable to fill, most commonly OH nurses
With 1/3 of the UK workforce aged over 50 and retirement ages increasing, employees will have greater healthcare requirements than in previous years
This will increase the need for employers to be more proactive in managing staff wellbeing, with technology playing a key role in supporting this

OH provision varies materially by provider, with the majority of companies offering 10 to 12 services
Core services offered by most providers include workplace adjustment advice, fitness for work adjustments and pre-employment health checks, with a diverse range of additional services based upon client needs and internal expertise
OH services are more frequently needed for employees in industries such as agriculture, forestry and construction, which have statistically higher workplace injury rates compared to the average rate across all industries

There has been a notable recent shift in attitudes as companies place more importance on health and wellness, with this trend likely exacerbated by COVID
In response to the pandemic, over half of organisations have increased employee wellbeing support, while just over a third are putting more focus on virtual health services
COVID has fundamentally changed the traditional workplace, with the movement towards hybrid and remote working looking set to remain
This brings a variety of new challenges for employers to ensure the health and wellbeing of their employees
With many workplaces now permanently offering hybrid and remote working options, occupational health provision has to be flexible to meet employers’ and employees’ needs
Through the use of technology and digital offerings, OH services can now be delivered in person and remotely, making them more accessible for all employees
This has allowed greater penetration of OH provision into SME companies, due to the flexibility and convenience of services
As a result, technology has been instrumental for OH through the pandemic, enabling virtual employee assistance programmes and healthcare services, often with quicker access than in-person appointments

There continues to be significant M&A activity within the OH market, with the most notable deal in 2022 being Marlowe's acquisition of Optima for £135 million
The deal confirms Marlowe’s position as the key consolidator of the OH market, with seven acquisitions totalling a value of £176.6 million since 2020
The OH market does however, remain highly fragmented in the UK, with a number of regional and niche operators creating opportunities for further consolidation
Various sizeable players have taken on private equity investment in recent years to fast-track growth, with bolt-on acquisitions playing a key part in their expansion strategies
Acquisitions have been targeted for a variety of purposes such as extending geographic and sector reach, and broadening service offering, with a growing interest in providing remote occupational health services
We expect to see operators from adjacent sectors entering the market through acquisition in the medium term as they look to capitalise upon the growth opportunities within the OH market
This will likely encompass players from private primary care, broader case management, and private medical insurance, where there is a strategic rationale for the move into direct OH provision

Marlowe PLC: Marlowe remains the most acquisitive operator within the OH market, following their recent acquisition of Optima for £135 million, as well as acquisitions of Integral OH, Healthwork and TP Health
PAM Group: PAM Group has utilised acquisitions as a core growth tool in recent years, and this is likely to continue following LDC’s minority investment into the business in 2021
Medigold Health: after receiving a £9.5m minority investment from BGF in 2018, Medigold utilised the funds to support the acquisitions of IMASS and Hampton Knight. Further deals are likely to boost growth going forward
Latus Health: Latus is a growing player within the occupational health market, with a three year growth strategy which includes utilising strategic acquisitions to become the UK’s first fully remote occupational health provider

Date	Target	Acquirer / Investor	Deal Type	Deal value
Jul 22	Healthcare RM	HCML	Acquisition	N/D
Apr 22	TP Health	Marlowe	Acquisition	£13m
Apr 22	Soma Health	London Doctors Clinic	Acquisition	N/D
Jan 22	Optima Health	Marlowe	Acquisition	£135m
Oct 21	Reward Me Now	Latus Health	Acquisition	N/D
Jun 21	PAM Group	LDC	Minority Investment	N/D
Jun 21	Healthwork	Marlowe	Acquisition	£17.2m
May 21	Integral Occupational Health	Marlowe	Acquisition	£2.4m
Jan 21	66 Fit	PAM Group	Acquisition	N/D
Nov 20	Wrightway	Marlowe	Acquisition	£4.5m
Nov 20	Concept Northern	PAM Group	Acquisition	N/D
Nov 20	Black & Banton	Marlowe	Acquisition	£1.5m
Mar 20	Managed Occupational Health	Marlowe	Acquisition	£3m
Sep 19	Maitland Medical	London Doctors Clinic	Acquisition	N/D