The Orpéa Group acquires SeneCura

Frankfurt, 20 January 2015. The Orpéa Group, one of the leading European providers of long-term care (nursing homes, medium-stay and psychiatric clinics), has today announced the acquisition of the SeneCura Group, Austria’s leading provider of long-term care in the private sector, with established presence in the Czech Republic. 

Orpea SeneCuraFurther strategic international expansion:

  • Acquisition of SeneCura, Austria’s leading long-term care provider in the private sector
  • Network of 4,236 (55 facilities) that generated revenue of EUR 125 million in 2014
  • New development platform that is unique in Austria and the Czech Republic
  • 44% revenue growth secured over 4 years (EUR 180 million in 2018)

Acxit Capital Management – now part of ACXIT Capital Partners – acted as exclusive financial advisor to Orpéa in this transaction. The parties agreed not to disclose any details of the transaction.

SeneCura, Austria’s leading long-term care provider in the private sector

Founded in 1998, SeneCura is a family-owned group that has enjoyed solid growth over the past 10 years. Today, it is Austria’s leading provider of long-term care in the private sector with an integrated service offering assisted-living and care options for the elderly, comprising nursing homes (day centers, Alzheimer’s units, temporary stays), rehabilitation clinics, in-home care and services.

Thanks to the experience of its managers and the know-how of its teams, by year-end 2014 the SeneCura had built a unique network of 55 care facilities, with a total of 4,236 beds, breaking down as follows

  • Austria: 3,936 beds (52 care facilities), including 480 beds under construction;
  • Czech Republic: 300 beds (3 care facilities) under construction.

In 2014, SeneCura generated EUR 125 million in revenue. With its growth pipeline of 780 beds, the Group has already secured EUR 180 million in revenue out to 2018, representing a growth rate of 44%.

SeneCura’s offering and business model are comparable to Orpéa’s, with

  • an offering renowned for the quality of its care and services, SeneCura having landed numerous awards in the regions it serves;
  • facilities located at the heart of cities and urban centers in 7 of Austria’s 9 regions;
  • a single room rate of around 70%;
  • a portfolio of recently built facilities (mostly after 2003);
  • an occupancy rate of care homes close to 100%;
  • a hybrid property policy combining full ownership, building leases and leasing contracts with an expected ownership of 30% of the buildings in the future.

A unique position in a country with buoyant fundamentals

With over 15 years’ experience in caring for the elderly, SeneCura is a leading high quality nursing care provider in the Austrian market with a unique position. The other private-sector operators, which are far smaller in size, are local groups focused on a single region.

The Austrian long-term care sector has solid and buoyant fundamentals, with strong and sustainable growth prospects for the next few years

  • significant population ageing: the number of people over 80 is set to double by 2040 to 800,000, making it one of the strongest growth rates in Europe;
  • insufficient care capacity: one of the lowest per capita capacity rates in Europe, hence a need for an additional 30,000 beds by 2030, i.e. almost a 50% increase in existing capacity, all sectors combined;
  • supreme dominance of public-sector and non-profit organisations, which account for 90% of the beds authorised to date, against the backdrop of cutbacks in public spending;
  • stringent and complex regulations involving regional permit systems. Expansion therefore requires solid know-how and experience;
  • strong purchasing power, with annual GDP per capita of $49,050, i.e. 40% above the European Union average.

In the Czech Republic, SeneCura has begun to expand into regions with strong purchasing power, particularly in the Prague area.

Both countries fit the Orpéa Group’s expansion criteria, as they offer the prospect of strong and sustainable development over the coming years.

A unique platform for future development

With Orpéa’s backing, SeneCura will be able to step up its expansion in both Austria and the Czech Republic by developing new facilities and carrying out selective acquisitions.

With an expert-led management team boasting an established network of contacts in the supervisory authorities and a sound reputation for quality and innovation, SeneCura aims to

  • strengthen its position in Austria in all aspects of long-term care;
  • become the sector leader in the Czech Republic by establishing new facilities compliant with Group standards;
  • maximise its margins by harnessing Orpéa’s expertise in centralising functions and controlling.

These ambitious development plans for Orpéa’s strategic positioning in Austria and the Czech Republic will create substantial value for the Group.

Another deal set to boost earnings from 2015

The acquisition of SeneCura will be finalised on 1 April 2015, and the new subsidiary will be consolidated by Orpéa from that date onwards.

Payment for the deal will be made solely in cash from Orpéa’s reserves. Thanks to the early repayment of its OCEANE bonds as announced in early January, as well as various very attractive financing already obtained, the Group boasts substantial financial flexibility.

The acquisition of this strategically important asset, together with a property portfolio, will meet the Group’s investment and financial discipline criteria. Like its two recent acquisitions in Germany and Switzerland, this will also boost the Orpéa Group’s earnings per share from 2015 onwards.

Post the transaction, Orpéa’s network will consist of 56,314 beds at 579 facilities, 43% of which will be outside France.

“Following the acquisitions of Senevita in Switzerland and Silver Care in Germany in 2014, Orpéa has made a great start to 2015 by completing another strategically important deal with tremendous development potential.

This acquisition of an asset with a unique competitive position in Austria and the Czech Republic gives Orpéa another growth and profitability driver, as well as value-creating expansion opportunities.

Thus, the Group is continuing its expansion into Europe by adding a new source of future growth, while strictly complying with its profitability criteria.

Given its financial flexibility and the opportunity of attractive financing, the Group will continue to pursue its strategy of international expansion by obtaining operating permits and making selective acquisitions.”

– Yves Le Masne, Chief Executive Officer Orpéa

“The powerful international development momentum built up in 2014 has carried forward into early 2015. In 12 months, the Group has made three strategic acquisitions adding 12,492 beds, of which 17% are under development. These deals will ultimately boost annual revenues by EUR 510 million.

These developments are especially promising because Orpéa has acquired three platforms combining expansion potential with a strong operational reputation located in countries with robust, dynamic and stable economies where the elderly population enjoys strong purchasing power.”

– Dr Jean-Claude Marian, Orpéa’s Chairman

Advisors

Acxit Capital Management – now ACXIT Capital Partners, represented by Thomas Klack and his team, acted as financial advisers, with Bredin Prat acting as Orpéa’s legal counsel. Credit Suisse and EY acted as SeneCura’s financial advisers and Klemm Rechtsanwalts-GmbH as its legal counsel.

About ORPEA

  • 31,871 beds in France (3,979 under refurbishment or construction) across 345 facilities
  • 24,443 beds in Europe – in Austria (subject to closing of the SeneCura transaction), Belgium, Germany, Italy, Spain, Switzerland and Czech Republic – (5,430 under refurbishment or construction) across 234 facilities

About ACXIT Capital Partners

ACXIT Capital Partners is a leading international corporate finance and investment advisory firm for mid-market clients and entrepreneurs in Europe and beyond. 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. As an independent, privately owned firm we maintain offices in Frankfurt, Berlin, Munich, Zurich, Vienna and Hong Kong as well as strong alliances in China, India and the USA.

To date, we have completed more than 350 transactions with a total deal/financing volume of approx. EUR 17bn. Our clients are corporations, family-owned businesses, entrepreneurs, financial sponsors and family offices. While our home market is in the German speaking region, most clients are international and transactions cross-border. (www.acxit.com)

Press contact:

ACXIT Capital Holding GmbH
Siesmayer Carrée
Siesmayerstraße 21
60323 Frankfurt am Main
Germany
www.acxit.com

facebook.com/acxitcapital
twitter.com/acxitcapital
xing.com/companies/acxitcapitalpartners
linkedin.com/company/acxit-capital-partners

E-mail: press@acxit.com

Dr. Ingmar Ackermann, Managing Partner
E-mail: Ackermann@acxit.com

Transaction team:

Thomas Klack, Managing Partner
Ruta Morkeliunaite, Director
Stefan Hampker, Analyst
Philipp J. Keller, Analyst

Tags: