• transactions


Newsletter November 2020

November 2020
for Europe & Germany
News Europe
Exemplar Health Care to be acquired in Secondary Buyout by Ares Management
Founded in 1999, Exemplar Health Care is a leading UK provider of high acuity disabled care services for individuals with complex physical, mental and learning disabilities. The Group operates 32 specialist nursing homes across the UK.
In 2016 Exemplar Health Care was acquired in an MBO by UK PE Agilitas for an estimated consideration of EUR 180m. It is rumored that the Group was now marketed at ca. EUR 22.5m EBITDA in the transaction with Ares concluded in November 2020.
News Germany
BioNTech / Pfizer developed COVID-19 vaccine showing effective rate above 90% in Phase III study
On November 9th, the Mainz-based BioNTech and their partner Pfizer announced that their COVID-19 vaccine is providing for protection against an infection with the disease in more than 90% of the test person in their clinical Phase III-study making them the leading team in the race to marketing an effective vaccine.
As a result of these promising news, the global stock markets took off inclining i.e. by up to 6% or 7% (DAX-30 and EuroStoxx50 respectively).
Advent to sell Mediq with a potential EUR 1.2bn price tag
Netherlands-based Mediq Group, a distributor for medical equipment and pharmaceuticals to clinics and patients has been put up for sale. 
Advent, which took Mediq private in 2013 followed by a series of add-on acquisitions, is targeting a valuation around 12x-13x EBITDA.
Reportedly, a private equity buyer is almost certain as there is only little interest from strategic parties.
Bayer acquires US-based Asklepios BioPharmaceutical to expand product offering in cell and gene therapy
Asklepios BioPharmaceutical is specialized in the research, development and manufacturing of gene therapies across different therapeutic areas.
The German pharmaceutical giant Bayer AG was set to pay an upfront consideration of USD 2bn and potential success-based milestone payments of up to USD 2bn.
Cinven mandates banks for the Synlab 2021 IPO that will value Synlab at EUR 5bn-6bn
Synlab was acquired by Cinven in 2015 for EUR 1.7bn and then merged with the France-based Labco to become Europe’s largest lab services provider. Supported by Cinven, Synlab established itself as one of the strongest consolidators in the European lab market.
Given the strong interest of financial investors in healthcare assets a dual track process is not ruled out. 
Asklepios successfully places Schuldschein loan of EUR 730m
Late October the acute clinic operator Asklepios placed a Schuldschein loan. Due to the high market demand, the transaction was highly oversubscribed, thus the originally targeted volume of EUR 200m had been increased significantly.
A large part of the funds raised will be used for the early repayment of the acquisition financing of the Rhön-Klinikum AG transaction.
Korian in exclusive negotiations for the acquisition of Inicea, France’s 3rd largest group of psychiatric clinics
French nursing care giant Korian is reportedly set to acquire Inicea from Antin Infrastructure Partners at a targeted value of around EUR 360m which will be financed by a capital increase of EUR 400m.
This transaction is not the only upcoming acquisition of a mental health provider, as PE-backed Dutch Mentaal Beter has been put up for sale by NPM Capital.
Meine Radiologie Holding GmbH has acquired a majority stake in Diagnostikum Berlin
Meine Radiologie, backed by Triton Partners, has become the majority shareholder of Diagnostikum Berlin, a German supra-local and multidisciplinary medical care center for radiological diagnostics.
The transaction underlines its successful consolidation strategy, despite the difficult market environment.
French nursing home operator Groupe Colisée to be sold to PE firm EQT Infrastructure
The PE-backed French nursing care operator Group Colisée will be sold in a Secondary Buyout by IK Investments to EQT Infrastructure co-invested by the Canadian pension fund CDPQ. The deal is reportedly expected to value the Company well over EUR 1bn while IK itself acquired Groupe Colisée for ca. EUR 650m in 2017. 
EQT will continue to support the growth strategy focusing both on current as well as new markets.
French medicalized homecare operator Santé Cie has acquired German competitor APOSAN
Santé Cie, acquired by PE investor Ardian in January 2020, continues its successful internationalization strategy by acquiring APOSAN from IK Investment.
APOSAN is a leading specialized homecare provider in the field of outpatient parenteral antibiotic therapy, as well as parenteral & enteral nutrition and ophthalmic injectables.
The German telemedicine pioneers Fernarzt.com and TeleClinic have been acquired by Marcol and the Swiss Zur Rose Group respectively
In July, Europe’s largest online pharmacy group Zur Rose Group AG has acquired the German telehealth player TeleClinic for a purchase price in the mid-double-digit million Euro range. The acquisition of TeleClinic is an important building block, adding complementary telemedicine services to the Zur Rose Group Healthcare Ecosystem providing seamless and personalized health journeys for consumers.
In early August, the British PE Marcol acquired the German telemedicine platform Fernarzt.com from Heartbeat Labs, which will retain a minority share and remain the strategic partner for the German market.
ACXIT Capital acted as financial advisor in both transactions advising Zur Rose Group as well as the Seller of Fernarzt.com Heartbeat Labs.
Sources: Company Information, Reuters, Mergermarket, ACXIT Capital Research

Outlook following Half-Year Results, second wave of lockdowns and US elections
After the first severe outbreak in March this year, a lot has changed in our economy. Businesses had to adapt to the COVID-19 pandemic. Both the COVID-19 pandemic and restrictive measures including local lockdowns to contain the virus have led to a global recession which also Europe and Germany could not escape. 

However, the virus impacted various industry sectors differently. And the crisis even produced some winners starting with tech-enabled retail, digital solution enablers and others. With ten months of crisis economy and trillions of Euros spend on countermeasures and economic stimulus it is too early to predict whether the healthcare service industry remained on the bright sight or whether it can’t withstand the second wave of lockdown restrictions. 

Healthcare services

As the virus is an attack on the human health, it was to be expected that the healthcare sector had to be an early mover in finding ways to adapt to the threat from the COVID-19 virus. 

Companies had to react quickly and remain adaptable to a frequently changing operating environment, as operational regulations and policies evolved. The acute clinic sector was particularly affected as COVID-19 patients required intensive care capacity and elective procedures were (required) to be postponed. However, this latter restriction even more over-proportionally effected specialized healthcare service providers such as beauty, dental and ophthalmology clinics due to regulatory closures and patients‘ reluctance to undergo treatments in COVID-19 times. On the other hand ambulatory and stationary nursing care operations represent essential services which can not be suspended. Care processes were significantly adjusted in order to minimize risks for residents and patients as these represent a major risk group for the COVID-19 virus. Overall, safety measures for employees, patients and residents had to be implemented by all healthcare service operators leading to stress tests for employees and supply chains as well as increasing costs, e.g. for sufficient protective clothing and disinfectants. 

While most of the healthcare providers have proven their operational excellence in the COVID-19 crisis, the financial performance remained an open question for some time. It was hard to predict how the healthcare market has developed in the first half of 2020 compared to the first half of 2019 and how its financial performance translates into relative attractivity to other industries. The currently reported H1-2020 results reveal that although the companies in the healthcare services segment in average suffered only small declines in revenues, cost were significantly impacted by higher costs in 2020 thus leading to a decrease in EBITDA. 

A comparison of H1-2019 results with H1-2020 results shows that the companies listed in the EURO STOXX 50 index recorded overall revenue decline of approx. -12%. For the same period, the average revenue for listed healthcare services companies in Europe decreased by only -4%.

However, a sharper decline of -17% in reported EBITDA of healthcare services operators in the period 2020 first half year (compared to 2019 first half year) shows that the sector is not totally immune against the crisis. The overproportionate decline compared to revenues can be explained by higher costs for protective equipment, testing of employees and patients, sick leave, and maintaining ample capacity for intensive care patients. The decline in profitability shows also that government support measures could only partially offset the increased costs. Nonetheless, other companies listed in the EURO STOXX 50 are again more severely affected with an average decline of -23% in their reported EBITDA for the first half year of 2020.

Leaving traditional healthcare providers aside, there have been clear beneficiaries of the crisis. The group comprises providers of telemedicine, online pharmacies and suppliers of medical materials which are relevant for containing the virus as these even reported +7.5% in EBITDA H1-2020 in comparison to the previous year. So far, the message is a little bit better than expected but also no real surprise.

Valuation in the healthcare services market

After healthcare service providers had a good and promising start into the year 2020, they had to face severe losses, with their low point in March, on the back of the first confirmed COVID-19 cases in Europe, high uncertainty due to this new situation of a global pandemic and the subsequent lockdown. The worst impact at the time was felt by the clinics, reha & primary care sector, which suffered losses of up to 40% in the meantime. However, with further easing of the government’s lockdown restrictions, activities are gradually returning to normal and share prices are developing positively.

Representative for the course of development so far are Korian and Orpea. Both companies got off to a good start in January and February reaching new peaks, but then suffered an enormous drop in share prices with the start of the lockdowns. As a result, both adapted to this extraordinary situation and share prices recovered slowly. However, following the announcements of the half year results in combination with the fear of a second round of lockdowns destroyed investors trust in a near-term return to past growth rates and consequently resulted again in an erosion of share prices. In particular, the exposure of these companies to Italy, Spain, Portugal, and France worried investors. This rollercoaster development of the share prices is complemented by the recently announced progress for a development of an effective vaccine leading to major share price recovery. Nevertheless, given the strong collapse in March and only moderate recovery, both stocks trade still 20% and 35% below the pre-COVID-19 level for Orpea and Korian respectively.
Source: S&P Capital IQ as per 10.11.2020
In contrast to volatile public markets, M&A activity in the healthcare sector has remained high across Europe with transactions being executed at attractive valuation levels. Deals like the acquisition of Teleclinic by the online pharmacy ecosystem Zur Rose Group (advised by ACXIT Capital) show that digital healthcare providers are seen as attractive targets due to expected opening of healthcare systems to digital solutions (meaning reimbursement of digitally provided health services). But also transactions of traditional healthcare service providers like Exemplar Healthcare, Groupe Colisée, INICEA or the expected sale of Elysium Healthcare and others show that this segment remains in the focus of potent strategic and financial investors.

While their effectiveness is widely debated, lockdowns seem to have become a ruling politicians’ favorite tool to react to the immanent COVID-19 threats restricting citizens and strangling businesses (in particular with retail or industrial exposure). However, these measures will not change the fact that the COVID-19 virus will impact our lives and businesses also in 2021 (and beyond). On the other hand, the recently imposed second lockdowns all over Europe resulted in a much smaller setback of the stock exchanges in comparison to March indicating a better understanding of the current situation with crisis management tools in place. In addition, the stock markets‘ euphoric reactions to positive vaccine news (driven by promising phase-III results of German BioNTech AG and US-pharmaceutical Pfizer), supported by the outcome of US elections shows how eager the market is to leave COVID-19 behind. In combination with investors being pressed by their liquidity to further investments, especially the technology and healthcare sector (or even a combination of both) remain key focus areas of investors. Therefore, we remain confident to expect also for the rest of the year robust valuation levels and continuing deal activity – watch the space. 
European Healthcare Companies Outperform EURO STOXX 50

Comparable Company Analysis
Source: S&P Capital IQ as per 10.11.2020
Healthcare Indices vs EURO STOXX 50
Source: S&P Capital IQ as per 10.11.2020
Managing Partner
+49 69 247 414 120
+49 69 247 414 130
About us

ACXIT Capital Partners is a leading international corporate finance and financial advisory firm for mid-market clients and entrepreneurs in Europe and beyond. As an independent, privately owned firm, we maintain offices and representations in Frankfurt, Berlin, Munich, Zurich, Hong Kong and New York as well as strong alliances in Great Britain, France and India. Our clients are corporations, family-owned businesses, entrepreneurs, financial sponsors and family offices.

Our Services

Since 1998, we offer our clients comprehensive corporate finance advisory services including M&A and capital markets advisory as well as restructuring, debt and strategic advisory. To date, we have completed more than 450 transactions with a total deal/financing volume of approx. EUR 20bn. While our home market is in the German speaking region, most clients are international and transactions cross-border.

Our Industries

Our advisory expertise is founded on an in-depth understanding of the key industries served by the company. Our core industries are healthcare and digitalization/technology. Our strong track record in our core sectors is complemented by prominent transactions for industrial, real estate and financial investors.
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