Investors flock to buy Romanian healthcare groups
publication date: Nov 22, 2009
Societe Generale Asset Management has bought a 36.25% stake in Romanian
clinic and subscription operator MedLife, probably the largest private
operator in Romania, for EUR 20m, some 10 times EBITDA. Meanwhile, rival CMU
Unirea where 3TS is selling it stake has apparently had 12-13
interested parties, all willing to pay over 9.5 times EBITDA.
The high prices reflect the long-term value that private equity investors see in private healthcare in a country of 23m.
But they have surprised some onlookers. A senior manager in a rival operator said: “This is a high price for a minority stake in a business run by Romanians! It is a good thing for the sellers that the buyers are not already active in Romanian healthcare. Most big subscription contracts are now being done at or below cost – the competition is intense. Margins have dropped 20-30 percentage points. The number of individuals covered has risen, but I’m not sure that sales have.”
MedLife ended 2008 with net sales worth €21.2m, up 67 percent year-on-year, and expects €31.5m in turnover this year. SGAM ought a 30% stake from the Marcu family who are left with a controlling 51% and also picked up 6.25% from IFC which now holds 12.75%.
