Deal in focus: Apax and Nordic Capital make SEK 2.5bn on Capio IPO

The listing on the Stockholm Stock Exchange priced Capio's shares at SEK 48.50 apiece and saw the GPs' holding vehicle place 34.1% of the company's share capital in free float, corresponding to SEK 2.33bn. The total value of the partial exit will be around SEK 2.5bn, provided the 3.4% over-allotment option is exercised.

Exiting funds include the €1.9bn Nordic Capital Fund VI (2006), the €4.3bn Apax Europe VI vehicle (2005) and the €700m Apax France VII fund (2006).

JP Morgan and SEB were joint global coordinators, as well as joint bookrunners alongside Carnegie and Deutsche Bank.

Capio said the offering was substantially oversubscribed, which was supported by the fact the number of shares placed in the offering was near the top of the 25-37.5% free float range suggested in the company's intention to float.

Ahead of the commencement of trading, the placement of significant stakes with Swedish institutional investors had already been announced: R12 Kapital, the Fourth Swedish National Pension Fund, Swedbank Robur Fonder, and Handelsbanken Fonder have acquired stakes of 6.2%, 5.5%, 5.5% and 3.2%, respectively.

Although the listing price is substantially below the SEK 15.6bn (€1.72bn) Nordic Capital and Apax paid to take the company private in December 2006, it follows a partial realisation in 2011, which saw Capio divest its Spanish hospital unit to CVC for €900m. Additionally, the GPs also sold off the company's UK subsidiary for £193m in September 2007.

Capio was up slightly on its opening price after trading began on the Stockholm Stock Exchange, despite the market opening with a predicted fall due to the crisis in Greece.

Welfare wounds
In Sweden, Capio's listing announcement was received with some controversy, and reignited the debate surrounding private equity investments and public services.

The beginning of the so-called Carema scandal in 2011, in which Triton Partners-owned eldercare company Carema Cares was accused of neglect and mismanagement – resulting in significant media coverage, public outrage and heated political debate.

Although Capio was not involved in the scandal, questions were raised about private equity ownership of Swedish companies that received money from the state to provide welfare services.

Around 86% of Capio's revenue is generated in Sweden and France and it receives substantial inflows from the compensation paid for treating patients that have been referred by national healthcare systems.

When Capio announced its intention to float, Jonas Sjöstedt, the leader of the left-of-centre Vänsterpartiet party, told Swedish newspaper SvD Näringsliv the pension funds' investment in the Capio IPO could see private equity companies "burn the taxpayers' wallet twice", by taking out money in profits and then selling the company to the public.

He accused Capio's owners of wanting to dump the company on the public to avoid potential losses if the government was to limit the size of profits that can be made by private owners of welfare services.

Sjöstedt's comments refer to a long-standing debate in Sweden about potentially limiting how much money private owners of companies receiving money from the state to provide welfare-related services would be allowed to take out of the business.

Likewise, some analysts suggested the listing was overpriced considering the substantial threat to Capio's profit if the remuneration paid by the state for procedures was reduced, as was the case when Stockholm's local government cut such reimbursements by 5% earlier this year.

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• Topics
• Nordics
• Healthcare
• Exits
• Deal in focus
• Nordic Capital
• Apax Partners
• Apax France SA
• Sweden
• JP Morgan
• Unq2015July