Deal in Focus: Blackstone sells Vitalia to CVC’s Vedici

Blackstone's recent sale of Vitalia, which remains subject to approval from the French competition authorities, is expected to be finalised during Q4. Vitalia's enterprise value remains confidential, but sources close to the situation confirmed to unquote" it lies around the €950m mark.

The deal will see Vitalia merge operations with Vedici, acquired by CVC from 3i and Nixen in June 2014. The resulting group is estimated to represent a combined €1.2bn consolidated turnover and 12% of the entire private hospitalisation market in France.

According to both parties, the new business will employ a workforce of 14,000 professionals across 81 healthcare centres. There are plans to dedicate some of the funds to research and development efforts, as well as service personalisation for the 1.2 million patients the group expects to treat on a yearly basis.

Vedici's acquisition of Vitalia was partially financed via CVC's fifth fund, an €11bn vehicle closed in 2008. Co-investing alongside the GP were a number of French institutional investors; a debt facility also partly financed the purchase.

In addition, funds were drawn from the sale of 17 facilities owned by the acquirer, unquote" understands. The package, reportedly worth a combined €651m, was sold to Icade Santé, the real-estate subsidiary of Caisse des Dépôts et Consignations.

The takeover comes amid consolidation movements in the French private hospitalisation market, with clinics converging around an increasingly small base of private-equity-backed platforms. Most recently, Gimv's Almaviva Santé announced a merger with Clinique Arago and the Domus Cliniques Group. The move, leading to the creation of the largest private operator in the Provence-Alpes-Côte d'Azur area, was the latest in a series initiated when Almaviva was founded in 2007 as a build-up platform.

Second time lucky
Established in 2006, Vitalia is a private clinic operator currently managing 42 facilities across France. It employs 7,200 professionals and claims to have become the country's second-largest private clinic owner since its inception. In 2014, the Paris-headquartered business posted €705m in revenues, with an EBITDA thought to sit around €110m.

The business will join forces with Vedici nine years after being picked up by Blackstone, which has remained the company's sole owner until this point. The GP created the group between 2006 and 2008 by bringing together individual clinics that were previously purchased via the firm's second European real estate fund.

The buyout, announced in 2006, saw Jean-Baptiste Mortier (previously managing director at the GP's Paris office) become Vitalia's CEO. Meanwhile, Christian Le Dorze was named head of the business's supervisory board. According to sources close to the transaction, a debt facility was provided to support Blackstone's takeover and then refinanced via a syndicate of lenders in 2011.

Blackstone began considering an exit scenario for Vitalia as early as two years after the buyout, when conversations were established with suitors CVC and Holding Batipart. The firm, which had set a €1.2-1.4bn price for the business when the process was initiated in April 2008, announced four months later that the sale would be postponed. At the time, it was believed an agreement was not reached due to the bidders not meeting Blackstone's conditions.

Divestment plans were thus deferred until late 2014, when Blackstone was approached by a number of bidders including existing healthcare players and names from outside the sector and negotiations took off, unquote" understands.

Advisers
Equity – Taj, Olivier Venzal, Bertrand Jeannin (Legal).

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• Topics
• France
• Buyouts
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• Deal in focus
• France
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