A buy-and-build group consolidating the NHS supplier market
The National Health and Medical Services Group of Companies is acquiring owner-managed businesses that supply NHS hospitals across England, combining them into a national group with shared infrastructure, procurement leverage, and multi-category contracts.
The market context
The NHS is the largest single purchaser of goods and services in the United Kingdom. NHS Supply Chain re-estimated the total NHS product and services market at £7.9 billion for 2023–24, while NHS trusts spend approximately £3.4 billion per year outside NHS Supply Chain's procurement framework altogether. Healthcare and social work SMEs collectively invoiced the public sector £14 billion in 2024.
That market is supplied almost entirely by small, independent owner-managed businesses. There are more than 1,400 procurement frameworks managed across NHS trusts and Integrated Care Boards, and no single private group has consolidated a meaningful share of the non-clinical supply base. The market is structurally fragmented.
“£7.9bn
Re-estimated total NHS product & services market, 2023–24”
“£3.4bn
NHS trust spend outside NHS Supply Chain’s procurement annually”
“1,400+
Separate procurement frameworks across NHS trusts and ICBs”
Why consolidation is relevant now
Several policy changes are converging to increase pressure on smaller NHS suppliers. The Procurement Act 2023, which replaced the previous regime from February 2025, places new compliance, carbon reduction, and social value obligations on suppliers bidding for NHS contracts. Multi-category tendering is increasing — NHS hospitals seek fewer, more capable suppliers rather than managing hundreds of individual vendor relationships. Suppliers that cannot demonstrate group-level compliance, tendering capability, or procurement scale are at a structural disadvantage in this environment.
At the same time, the owner-managed businesses that supply the NHS are ageing. Succession is a growing issue across this sector. Many founders are in their fifties or sixties with no clear exit plan. That creates a supply of willing sellers at realistic valuations.
The National Health and Medical Services strategy
The National Health and Medical Services Group of Companies — referred to throughout this page as NHMS — is executing a buy-and-build strategy. The aim is to acquire approximately 55 owner-managed businesses supplying NHS hospitals across England, integrating them into a national group under shared central infrastructure.
The stated commercial goal is a group enterprise value of approximately £375 million, targeted over a 5-to-7-year period
What buy-and-build means in practice
NHMS acquires businesses at entry-level multiples typical for the size and sector of each target. As the portfolio grows, the group's combined scale, infrastructure, and market position support a higher exit valuation than any individual company could achieve alone. This gap between entry and exit multiple — commonly called multiple arbitrage — is the core financial mechanism of a consolidation strategy. Research on European healthcare buy-and-build roll-ups reports an average IRR of 31.6%, compared with 23.1% for standalone PE transactions. These figures are from external research and are not a projection of NHMS returns.
How NHMS creates value at group level
Four levers are central to the NHMS operating model, as set out on the company's website:
Centralised operations — tendering, compliance, finance, and operational administration are managed at group level, reducing cost and burden on individual businesses.
Procurement leverage — consolidated purchasing requirements across the portfolio create economies of scale and better input pricing for each acquired business.
Multi-service tendering — the group can bid for multi-category NHS contracts that no single small supplier could win independently, expanding the revenue opportunity for the portfolio as a whole.
Shared infrastructure and capability — group-level support in areas such as regulatory compliance, carbon reporting, and NHS contract management reduces the cost and risk of navigating a demanding and increasingly complex procurement environment.
Acquisition criteria
NHMS targets businesses that meet a specific financial and operational profile:
Priority sectors
NHMS has categorised target sectors by acquisition priority:
Priority 1
Transport & Logistics
Patient transport, courier and specialist distribution services to NHS hospitals.
Priority 1
Pathology & Testing
Laboratory services, diagnostic testing and sample processing for NHS hospitals.
Priority 2
Healthcare IT & Digital
Software and technology products with NHS hospital customers. Treated with caution given dominance of large vendors.
Priority 1
Facilities & Estates Management
Cleaning, catering, laundry, maintenance and associated estates services to NHS sites.
Priority 1
Clinical & Non-Clinical Consumables
Supply and distribution of wound care, continence, uniforms, cleaning materials and other consumables.
Priority 2
Workforce & Training
Healthcare training providers and non-clinical workforce suppliers to NHS hospitals.
How to enquire
Investment discussions are conducted privately with eligible investors only. NHMS does not make public solicitations. If you are a self-certified sophisticated investor or high net worth individual and would like to understand more about the group's investment opportunity, please make initial contact by email.
All enquiries are treated in strict confidence. Initial conversations carry no obligation.
Request a private conversation
Initial discussions are confidential and carry no obligation. Eligible investors only.
Sources and data references
National Audit Office, NHS Supply Chain and Efficiencies in Procurement, January 2024. Total NHS product & services market re-estimated at £7.9 billion for 2023–24. NHS trusts spend approximately £3.4 billion outside NHS Supply Chain's procurement.
Tussell / British Chambers of Commerce, SME Procurement Tracker 2025. Healthcare & Social Work SMEs invoiced the public sector £14 billion in 2024.
pharmaphorum, Why the NHS Remains the World's Most Challenging Healthcare Market, 2025. More than 1,400 procurement frameworks across NHS trusts and ICBs.
GOV.UK, How SMEs Can Work Effectively with the NHS, February 2026. Procurement Act 2023 in force from February 2025.
House of Commons Library, NHS Funding and Expenditure, September 2025. DHSC total budget 2024/25: £204.7 billion.
Hilton Smythe, What EBITDA Multiples Can You Expect for Your Industry in the UK Mid-Market, 2024. UK healthcare & pharmaceuticals average EBITDA multiple: 7.7× H1 2024.
healthcare.digital / DealRoom, Strategic Deployment in European HealthTech, October 2025. Buy-and-build average IRR 31.6% vs 23.1% standalone PE. European healthcare sponsor buyouts up 276% YTD June 2025.
NHMS website (nhms.health), Our Approach and Selling Your Business pages. Target enterprise value £375 million; ~55 acquisitions; 5–7-year timeline; target turnover £2M–£30M; four strategic pillars.
NHMS Corporate Structure Guide v2, February 2026. Three-layer holding structure; share class architecture.
NHMS Financial Model, February 2026. Portfolio company templates (small, medium, large); holding company assumptions; acquisition economics.
NHMS Intro for Owners v2, November 2025. Team background; buyer positioning; deal structure overview.
Labelling key: Data presented as [CITED] is drawn directly from the source identified. Data labelled [INFERRED] is drawn from internal NHMS documents