The French hospital sector is set to consolidate on a massive scale. There are lessons for other countries here, too.
Ramsay looks set to buy Generale de Sante. Meanwhile, Generale de Sante’s main rival Medi-Partenaires, is to be merged with a regional player in a reverse takeover. And we also hear that 3i has decided to stick a for sale sign up at Vedici, after its very ambitious management failed to reach agreement with Medi-Partenaires’ shareholders, led by LBO France. As one knowledgeable source put it: “Whatever happens 2014 will be the year the French hospital landscape is transformed.”
Stephane Pichon at Your Care Consult reckons these changes reflect falling tariffs, which are going to squeeze margins hard over the next few years. Similar forces are in play in most sectors in most countries. Expect similar moves in Portugal, Spain, Greece and Poland in hospitals, for instance, over the next two years. And the same will certainly happen in labs, where Amedes and Labco are both for sale.
To win, investors need strong management and here the good news is that there has been a marked improvement over the last three years. Guy Blomfield, CEO at imaging services group Alliance Medical has effected a turnaround. Dimitiris Mouliviades at the other big imaging player, Euromedic, has greatly increased profits. Jos Lamers at Unilabs is making a good start. And there are two main measures to their performance – organic sales growth and efficiency. These days, the emphasis is switching back to the former.
Ultimately, it is the ability of management to tell a credible story that will determine value – just look at the price fetched by Terveystalo in Finland in 2013.
Source: Healthcare Europe / April 17th 2014