London-headquartered private equity firm Fremman Capital has acquired Medinet, a UK-based insourcing services provider and partner to the NHS, according to the Financial Times.

Medinet, which markets itself as helping NHS organisations to reduce waiting times, has been sold by Volpi Capital to Fremman Capital for an undisclosed sum. Private equity has growing reach in the UK health system, having expanded into private hospitals, recruitment agencies, child and elderly care, foster and mental health services. Neither Volpi nor Fremman commented on the acquisition. SIA also reached out to Medinet and Fremman for comment, but the companies have not yet responded.

Fremman is a pan-European mid-market investment firm with offices in London, Luxembourg, Madrid, Munich and Paris. The company aims to invest in “sustainable businesses that have a positive impact on society”. In addition to Medinet, Fremman Capital’s other investment in the healthcare sector is Palex, a distributor of MedTech equipment and solutions for public and private hospitals and laboratories in Spain and Portugal.

The Medinet deal comes amid an acute staff shortage in the NHS and a wave of industrial action by employees demanding higher pay. Nearly 48,000 junior doctors are planning the longest ever walkout with a five-day strike from 13 July. Medinet is one of about 20 providers of insourcing, which involves agencies signing up NHS staff and finding them work outside their regular hours to treat patients on NHS premises.  Michelle Tempest, analyst at consultancy Candesic, said that insourcing and outsourcing by NHS trusts ‘had been increasing and would grow further as NHS trusts sought quick solutions to staff shortages.’

The NHS spent £55 million employing its own staff through specialist agencies in 2022, down from £62 million the previous year, according to freedom of information requests by Candesic. The practice has been criticised by NHS England, which leads the service in the country. It has said it “discourages” the use of insourcing because it “doesn’t provide any additional staff”.  Agency workers were also paid higher rates, which has a “ripple effect”, forcing other departments and trusts to raise pay, NHS England said.

Medinet posted revenues of £58.9 million last year, a 93% increase on the year before, according to Companies House filings.  “Waiting times in the NHS across the UK continue to grow and therefore demand for the business’ services will likely increase,” the company said in its annual accounts.