Priory Group, whose finance and administration centre is in Darlington, has bought the Craegmoor Group, making it the market leader in mental healthcare and specialist education.
Priory - recently sold to Advent International for £925m - will consolidate those divisions with the addition of Craegmoor’s portfolios of hospital and specialist educational colleges.
The combination of the elderly care operations of both companies will also create a large division with a strong development pipeline over the next 20 years.
Philip Scott, chief executive officer of Priory Group, said: “Priory and Craegmoor are extremely complementary businesses. Our combined strengths will enable us to offer our patients, pupils and their families access to a wider range of specialists, whilst also improving the continuity and co-ordination of care we are able to offer.
“Our management team is committed to ensuring that high quality service provision remains the top priority for the new group.”
Ted Smith, chief executive officer, Craegmoor Group, said, “It is a testament to the fantastic strides Craegmoor has made in the past few years that we have attracted the attentions of the leading business and brand in our sector.
“Our staff, the people we support and their families should be confident that the business is in safe hands and well positioned to form an important part of a larger group.”
Priory Group employs more than 7,000 people with experience in more than 60 hospitals, schools and care homes; Craegmoor has more than 6,000 staff and is recognised as the country's leading independent provider of support for people with learning problems, complex needs and mental health problems.