Frankfurt According to business circles, private equity investor Ergon Capital is putting up for sale the German intensive care group Opseo, which specializes in intensive care. Goldman Sachs Investment Bank is preparing an auction that could start in the fall, according to several people familiar with the transaction.
The company cares for seriously ill people, most of whom have suffered neurological injuries, need ventilation or are in a coma. About 5,500 nurses care for almost 1,500 patients across Germany.
Opseo has an annual operating result (Ebitda) of 60 to 70 million euros and could be valued 15 times more in the event of an acquisition, ie about one billion euros. Private investment companies are considered to be mainly interested. Ergon, Goldman Sachs and Opseo declined to comment.
While companies in other sectors are delaying mergers and acquisitions due to uncertain market conditions, many health deals are still expected. This is due to the frequent fixed profits of companies whose services and products are in demand regardless of the financial situation.
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More recently, the market for clinics in Germany has come under pressure due to the coronavirus pandemic and the loss of income due to free beds. This year, almost 60 percent of the approximately 1,900 clinics in Germany will be in the red. This emerges from the hospital evaluation report presented on Thursday by the RWI Leibniz Institute for Economic Research and the Institute of Health Operations.
The hospital market is under pressure to consolidate
According to experts, however, this will increase the pressure for integration in the industry and lead to more agreements.
Some are already planned: According to business circles, the hospital and medical group Fresenius wants to sell a minority stake in the Helios Clinic department. The group is currently exploring the market with Bank of America and JP Morgan. Specialized clinics such as the Artemis chain of ophthalmology clinics or the Oberberg clinics specializing in psychiatry are also available for sale.
Offers are also being prepared in the fragmented care market. Many nursing home chains are owned by private equity firms such as Nordic Capital, Waterland, Advent and Oaktree. They buy smaller providers and turn them into bigger companies.
Valuations are relatively stable. According to Stifel investment bank estimates, the average valuation of nursing home transactions in Europe over the past eight years has been more than twelve times the expected operating profit.
Product for sale German nursing homes
According to investment bankers, other providers will soon enter the market along with Opseo. Vonovia Deutsche Wohnen subsidiary puts Katharinenhof and Pflegen & Wohnen Hamburg for sale. Stakeholders approached the owner of Alloheim Nordic Capital earlier this year. However, no sales have been made so far.
GHO Capital-owned Linimed and Deutsche Fachpflege Gruppe, which is part of the Advent investor portfolio, are also expected to begin sales next year. Oaktree expressed interest from other investors in Vitanas last year, but ended up retaining its sponsor.
In 2020, Germany had the third highest health expenditure among OECD countries after the US and the UK: 13 percent of gross domestic product. Expenditure on care for the elderly represents 6% of the total cost of health care.
According to Statista, the number of people in need of care in Germany was 4.13 million. About 15,000 nursing homes and outpatient services care for people. About € 13 billion was spent on inpatient care in 2020.
More: Vonovia Deutsche Wohnen subsidiary launches nursing homes for sale