LBO France, Equistone exit hospital group to Bridgepoint

The divestment comes as LBO France is attempting to raise €1bn for its White Knight IX fund.

LBO France and Equistone Partners Europe will sell French hospital group Médi-Partenaires to UK-based Bridgepoint. 

Bridgepoint plans to combine Médi-Partenaires with Médipôle Sud Santé, a French private hospital group it purchased in 2011, to create the second largest private hospital group in France. Financial details of the transaction were undisclosed, but a source close to the matter said the enterprise value of the combined entity was between €1 billion and €1.25 billion. The merger is expected to close by the summer.

“This brings together two private hospital operators that have experienced strong growth over recent years and which, together, will become one of the most dynamic players in the industry,” Benoit Bassi, President of Bridgepoint France, and Vincent-Gael Baudet, in charge of the transaction at Bridgepoint, said in the statement.

The combined hospital group will have 6,300 beds and employ more than 8,500 people in 60 healthcare facilities spread across France. Founded in 1991, the group operates 24 strategically located private hospitals focused on medicine, surgery and obstetrics.

LBO France declined to comment beyond the statement. Bridgepoint did not respond to a request for comment at press time.

In March 2007, Equistone led a restructuring and refinancing of the company which valued the business at over €600 million. This transaction introduced LBO France as a new investor, according to Equistone’s website.

Under LBO France’s ownership, Médi-Partenaires’ turnover has increased by 77 percent, reaching €552 million in 2013. Last year, LBO France arranged a €385 million high-yield bond refinancing for the business, which allowed LBO France to pay out a €80 million dividend.

The sale of Médi-Partenaires  comes as LBO France seeks €1 billion for its successor fund, White Knight IX. A number of LP commitments are understood to have been made. It is expected that LBO France, which declined to comment on fundraising, will hold a €300 million first close before the summer.

Bridgepoint is currently investing Bridgepoint Europe IV, a €4.8 billion fund raised in 2008. The vehicle was approximately 80 percent deployed prior to this deal and secured a 12-month investment extension last summer after it became apparent it would not need to fund as many add-on acquisitions as planned. It is understood Bridgepoint has so far returned more than €1.4 billion to LPs from this fund. The firm aims to raise a successor fund later this year, although the target and timing are unclear.

Equistone is currently investing its Fund IV, a £1.5 billion, 2011-vintage. Last week, the firm bought a majority stake in Finaxy Group, a French insurance broker. Following this deal, Equistone’s Fund IV was approximately 55 percent deployed, a source familiar with the matter said at the time.