BC Partners has realised a sizeable profit on its investment in Hirslanden Finanz, Switzerland’s largest private hospital group, after selling it to listed South African company Medi-Clinic for CHF 2.8 billion ($2.4 billion; €1.7 billion).
The European buyout firm bought the business from UBS for €653 million in 2002, suggesting that it stands to make a substantial gain from its five year ownership of the company.
It has invested over CHF400m in Hirslanden, including the bolt-on acquisition of another clinic in Lucerne. As a result the hospital group has seen revenues grow by more than 30 percent under private equity ownership, hitting CHF 900 million last year.
Hirslanden, which now operates 1275 beds across 13 private acute-care hospitals, is Medi-Clinic’s first acquisition in Europe. The listed South African group, the third largest hospital operator in the country, is looking to expand by diversifying outside of its home market.
South African rival Netcare made a similar move last year when it teamed up with buyout firm Apax Partners to complete the acquisition of General Healthcare Group, a UK-based hospital operator.
Medi-Clinic will pay CHF 2.9 billion to acquire the entire issued share capital, giving the deal a total enterprise value of CHF 3.6 billion. It will be funded by a CHF 2.8 billion debt package from Barclays Capital, while Medi-Clinic will also contribute CHF 1.1 billion in equity, which it plans to raise partly through a rights issue. The company’s shares fell 3.8 percent yesterday to 22.61 rand following the news.
The deal is expected to complete in October 2007. Dresdner Kleinwort advised Medi-Clinic, alongside Standard Bank and Liberty Group, while Rothschilds advised the vendor.
BC Partners was unavailable for comment.