GED, a mid-market investor in Iberia and South Eastern Europe, has acquired Romanian medical equipment company Diamedix for €12 million. The investment secures GED an 80 percent stake in the business, with more than half of the €12 million consideration earmarked for a buy-and-build programme.
“This is a good platform for consolidation, even in these conditions,” Anca Ionescu, GED’s Romania country manager, said in an interview, “It is very important to have critical mass and financial power.”
Diamedix, which is based in Bucharest, provides equipment, testing facilities and other consumables to medical companies in the private sector. It is forecasting sales of €8 million for 2009.
|Romanian healthcare: needs critical mass|
While investment in Central and Eastern Europe has slowed in line with other markets around the world, the healthcare sector remains an area of interest to private equity players, in particular because of the opportunities for consolidation.
Advent International, a long-time private equity player in the CEE region, acquired Romanian drug manufacturer LaborMed last year in order to “actively pursue consolidation opportunities in a fragmented market”. The leading players in the sector only reach between 5 percent and 7 percent of the market, the firm said.
In Poland, CEE-focused private equity firm Mid Europa Partners is currently executing a buy-and-build strategy with portfolio company LUX MED in an attempt to consolidate the country’s health clinic market. It completed its fourth bolt-on in August last year.
GED plans to execute two further acquisitions for Diamedix in the next three months. “We have already identified targets,” said Ionescu.
The firm is currently investing GED Eastern Fund II, a €150 million vehicle that has so far made four investments in such sectors as telecoms and real estate. The firm has around €350 million under management and generated a gross internal rate of return on its first Eastern Fund of 25 percent, according to a press release.