Warburg Pincus scores 3x healthcare exit

An agressive roll out of Euromedic International by Warburg Pincus and its co-investors has trebled the firm's original investment. The company has been sold to Merrill Lynch's private equity group and Ares Life Sciences for some €800m.

Ares Life Sciences and Merrill Lynch Global Private Equity have bought Euromedic International, a pan-European healthcare services, from its current shareholders led by Warburg Pincus for about €800 million ($1.2 billion), according to a source familiar with the deal.

The source said the price gave Warburg Pincus an IRR of 60 percent and a money multiple of three times.

The incoming shareholders are backing the current management team, led by co-founders Joseph Priel, chief executive officer, and Janos Mészáros, the chairman.

Under Warburg Pincus’ ownership Euromedic grew quickly to a network of 153 wholly-owned healthcare centres in 14 countries, in which the company contracts primarily with public insurance funds and hospitals.

Euromedic benefits from increased levels of out-sourcing by governments, both as the result of the restructuring of existing healthcare service provision and the move to address unmet service requirements, Merrill Lynch said in a statement.

The incoming owners plan to pursue Euromedic's aggressive expansion strategy and strengthen its position in the growing and resilient dialysis and diagnostic imaging service markets across Eastern and Western Europe.

The company is broadening its reach and extending its services into laboratory diagnostics and radiotherapy within existing geographies and selectively expanding its geographic footprint.

Nick Lowcock, a senior advisor of Warburg Pincus in Europe, said in a statement: “We have backed Euromedic during a period of significant growth and consolidated its position as leader in its markets, entering ten new geographies through both organic growth and acquisitions.”

Merrill Lynch Investment Banking acted as advisor to MLGPE and Ares Life Sciences. Financing for the transaction is being provided by ING, Unicredit and Bank of Ireland.