Spanish healthcare group taps growth capital

Palamon Capital Partners and G Square have invested in Grupo SAR, an operator of health services for the elderly, which, says Palamon, is due to benefit from long-term demographic trends.

Grupo SAR, a Spanish provider of care services to the elderly, has received a growth capital investment from two European private equity firms. London-based mid-market firm Palamon Capital Partners teamed with G Square, a French healthcare specialist sponsored by the Galliardo family, to back the group’s growth plans.

Financial details were not disclosed, but a source close to the situation said the deal valued the business at more than €200 million.

Spanish long term care: demand set to rise

Established in 1992, Grupo SAR manages 39 residential and day care facilities and employs a staff of 6,350. It is the third largest Spanish healthcare services provider to the elderly and last year generated revenues of €127 million.

Investments in the Spanish healthcare market are set to benefit from both regulatory and demographic developments in the country, said Palamon principal Jaime Enrique-Hugas in an interview. Currently 17 percent of the population is over 65 years old, with this figure predicted to rise to 30 percent by the year 2050, giving Spain the globe’s second oldest population behind Japan, he said.

Legislation introduced in 2007 granting all Spanish citizens increased access to state benefits for healthcare treatment would also drive a “very long-term secular trend” for investment in the market, said Hugas.

The deal represents a partial exit from Grupo SAR for Spanish healthcare investment group Confide. The head of Confide and founder of Grupo SAR, Higinio Raventós, will stay on following the transaction as chairman of the group. Jorge Guarner, the existing chief executive, will also remain in position.

Palamon, which is currently investing its €670 million second pan-European fund, has the majority of its portfolio in the UK, Italy and Germany. This is the first Spanish investment for Palamon’s second fund.