Novescia buys Generale de Sante labs group
publication date: Mar 3, 2010
Novescia, a September 2008 start up, has purchased all the labs of Generale de Sante, the largest French private hospital group, for an undisclosed sum. In 18 months Novescia has already purchased 80 French labs.
The acquisition of the Generale de Sante labs, which our sources tell us had sales of €60m, almost doubles Novescia sales to a run-rate of €130m and probably means it has overtaken 3i-backed Labco to become the largest chain in France (apart from the two reference lab groups Cerba and Biomnis).
Chief executive Sylvain Chapuis says the strategy is to buy 20-30 labs in each of the largest cities and then to build a much larger regional lab, which
can handle 90-95% of all tests. The company is building in Paris, Marseilles, Lyon and Nice and, so far, has three regional labs. The strategy of building strength at regional level is similar to that followed by Apax-backed Unilabs. Labco, on the other hand, has over 100 labs scattered across the country and is, therefore, possibly less well placed to start building larger regional labs.
Novescia is owned by some 15 shareholders who have so far invested some €80m. Chapuis says they are a mix of small French investment funds and
family offices and that he is paying 5-6 times EBITA for the labs he is purchasing.
Competitors say that the Generale de Sante labs were not particularly high quality. Chapuis says he has long-term contracts with the GdS hospitals and that he beat several ambitious Germans to win the deal.
After the big five of Biomnis, Cerba, Labco, Novescia and Unilabs, he says the next largest players are regional and have sales of no more than €15-20m. The largest is likely to be Groupe LCD in Paris.
Our Analysis: Consolidation will be the name of the game in France over the next year. The new ordinance which means that labs no longer need to do 60% of tests on site is a licence for amalgamation.
The big question is what will the reference labs do? Consolidation means that fewer and fewer tests will be sent off by smaller players to Biomnis and Cerba. They have a choice between serving a shrinking market or hitting the acquisition trail which means they end up competing directly with their customers. We think Cerba will risk that and consolidate, whilst Biomnis is more likely to try and become an international reference lab chain. Both routes are fraught with danger.
The acquisition of the Generale de Sante labs, which our sources tell us had sales of €60m, almost doubles Novescia sales to a run-rate of €130m and probably means it has overtaken 3i-backed Labco to become the largest chain in France (apart from the two reference lab groups Cerba and Biomnis).
Chief executive Sylvain Chapuis says the strategy is to buy 20-30 labs in each of the largest cities and then to build a much larger regional lab, which
can handle 90-95% of all tests. The company is building in Paris, Marseilles, Lyon and Nice and, so far, has three regional labs. The strategy of building strength at regional level is similar to that followed by Apax-backed Unilabs. Labco, on the other hand, has over 100 labs scattered across the country and is, therefore, possibly less well placed to start building larger regional labs.
Novescia is owned by some 15 shareholders who have so far invested some €80m. Chapuis says they are a mix of small French investment funds and
family offices and that he is paying 5-6 times EBITA for the labs he is purchasing.
Competitors say that the Generale de Sante labs were not particularly high quality. Chapuis says he has long-term contracts with the GdS hospitals and that he beat several ambitious Germans to win the deal.
After the big five of Biomnis, Cerba, Labco, Novescia and Unilabs, he says the next largest players are regional and have sales of no more than €15-20m. The largest is likely to be Groupe LCD in Paris.
Our Analysis: Consolidation will be the name of the game in France over the next year. The new ordinance which means that labs no longer need to do 60% of tests on site is a licence for amalgamation.
The big question is what will the reference labs do? Consolidation means that fewer and fewer tests will be sent off by smaller players to Biomnis and Cerba. They have a choice between serving a shrinking market or hitting the acquisition trail which means they end up competing directly with their customers. We think Cerba will risk that and consolidate, whilst Biomnis is more likely to try and become an international reference lab chain. Both routes are fraught with danger.