Developing

Exclusive: Priory Seeks Help From Serco Boss

The owner of the celebrity addiction clinics of choice, The Priory, is poised to raid Serco, the FTSE 100 support services group, to appoint a new chief executive.

I understand that Tom Riall, a senior executive at Serco, is in advanced talks about taking over the helm of Priory Healthcare Group, which is owned by Advent International, the US-based private equity firm.

One of Britain’s biggest privately-owned companies, Priory Healthcare employs more than 10,000 staff at approximately 270 hospitals, schools and care-homes across the country.

Its prominence outside the industry is largely the result of its treatment of myriad celebrities for drug and alcohol addictions during the last decade.

Priory Healthcare was one of hundreds of companies which ended up in de facto state-ownership by virtue of the taxpayer’s bailout of Royal Bank of Scotland (RBS) in 2008. Advent bought the company in January last year following the collapse of talks between RBS and other financial investors including Bain Capital and Cinven.

Mr Riall has not yet formally agreed terms with Priory Healthcare, and people close to the company cautioned that his appointment could yet fall through. Mike Jefferies, the company’s chairman, is understood to have been in discussions with Mr Riall for some time.

As the head of Serco’s global business services arm, Mr Riall spends much of his time in India, overseeing the company’s business process outsourcing activities.

Prior to his current role, he held executive roles positions with Onyx UK Ltd and Reliance Group plc and joined Serco eight years ago as managing director of its home affairs business.

If he does join Priory Healthcare, Mr Riall will replace Philip Scott, who has run the group since 2007.

The industry has been under intense public and political scrutiny since the collapse of Southern Cross, Britain’s biggest care home operator, last year.

The business was heavily indebted and was struggled amid spending cuts imposed by local authorities, a key part of Southern Cross’s customer base.

In April this year, Priory Healthcare published in part the results of a review conducted by PricewaterhouseCoopers, the accounting firm, which “identified a number of areas requiring further development in order for the Group to demonstrate that it has in place effective systems for managing quality and safety and made a number of recommendations aimed at enhancing our existing quality assurance and governance arrangements”.

Priory Healthcare said it had identified a preferred candidate to replace Mr Scott but declined to comment on their identity. Serco declined to comment.