TheDeal.Com 15.09.2005
Boston private equity house Advent International Corp. announced the acquisition Wednesday, Sept. 14, of German nursing home group Casa Reha Betriebs- und Beteiligungsgesellschaft mbH in a secondary buyout from J.P. Morgan Partners LLC and local private equity firm ECM Equity Capital Management GmbH.
The companies would not disclose the price of the deal, but Bad Homburg-based Casa Reha is Germany's fifth-largest nursing home group, with 2004 revenue of €53 million ($65 million). It operates 24 facilities nationwide with more than 3,450 beds, and a further five nursing homes with about 700 beds under construction.
"It's a very nice growth story," said Advent's general manager in Frankfurt, Georg Stratenwerth, who declined to comment on the valuation. "We will also be making one or two add-on acquisitions, and we'll be putting more money to work in that."
Casa Reha, which says it is positioned "at the lower end of the medium price segment," says most residents or their relatives can finance accommodation and care expenses without welfare.
Germany has one of the fastest-aging but wealthiest populations in Europe, with the nursing care market valued at €17.2 billion, according to Advent, and growing at about 4% a year. As in other European countries, the combination of employee and employer insurance that has previously served to pay for elderly care is starting to prove inadequate, though it is better in Germany than in most countries. So there's more need for self-financing.
"There's a noticeable shift from public and nonprofit to private operators," said Stratenwerth, adding that the investment is a strong consolidation play in a highly fragmented and regionalized nursing home market.
Advent turned to Thomas Klack of German M&A boutique Acxit Capital Management GmbH for financial advice, while Hermann Schlindwein of Ashurst provided counsel.
