Eurazeo-backed DORC catches the eye of dealmakers with H2 process anticipated

Claude Risner and Rachel Lewis
05 June 2023

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DORC is once again turning heads in the M&A with the Dutch med-tech company’s owner, Eurazeo, to launch a sale, three sources familiar with the situation said.

Dealmakers have set their hopes on a H2 2023 launch for the company despite healthcare M&A struggling to get into gear so far in 2023.

With a sellside advisor still be appointed, the sources predicted that Eurazeo will wait until Q3 2023 before launching a process for this prized asset.

Numerous healthcare M&A transactions have fallen by the wayside this year, despite the sector outperforming. Large cap deals such as European Dental Group and VetPartners have been particularly tough to get over the line. But DORC is a strong sale candidate as it's well into the fourth year of the sponsor's holding period and, according to the second and third source, is performing well.

DORC has a Likely-to-Exit score of 36 out of 100 according to Mergermarekt's Likely-to-Exit model which tracks the likelihood of sponsors to exit a portfolio asset. The top input for its score under the model is the days held by the sponsor.

The company generated around EUR 45m EBITDA in 2021, meeting its forecast from 2017, the third source said. This was achieved despite the coronavirus pandemic interfering with routine hospital surgery, hitting equipment suppliers.

DORC could also further expand into China, which could might tempt Chinese private equity firms into an auction, the first source said. The rate of growth in vitrectomy machines in China is among the highest in the world as the population ages and conditions such as diabetes become more prevalent.

DORC's sale in early 2019 was hotly contested with sponsors CVC and Nordic as well as strategics such as Johnson & Johnson competing to acquire the manufacturer of ophthalmic surgery instruments from Montagu. Danaher, Carl Zeiss, Alcon and Bausch were also tipped as possible strategic buyers last time around.

In the end, Eurazeo won out with a EUR 430m EV bid. In 2020, it made a EUR 80m follow-on investment from its Eurazeo China Acceleration Fund.

Last year, DORC refinanced its senior debt through a cov-lite uni-tranche provided by Goldman Sachs, Partners Group, Bridgepoint, BOI and SMBC, according to a report by Mergermarket sister publication Debtwire.

Eurazeo took out a dividend through the deal, which was levered at around 6x EUR 45m structuring EBITDA.

Otherwise known as Dutch Ophthalmic Research Center, DORC is a manufacturer of EVA as well as medical consumables. It has a razor-blade model whereby it sells high-end surgical equipment as well as gauges, tamponades and other consumables.

Eurazeo did not return a request for comment.