Mid Europa exits LUX MED

The sale generated a 2.5x money multiple and an IRR of 20% for investors. It marked the largest private equity exit in Poland since Mid Europa's €600m sale of Aster in 2010, and the largest private equity deal in the country in 2012.

The exit was initiated by Mid-Europa, which mandated Rothschild's London-based healthcare team to structure the process. Launched in October, it took the form of a two-stage auction, however Bupa put in a preemptive offer before the second stage, scheduled for January 2013, took place.

The auction saw bids from both private equity houses and strategic buyers to begin with, however Bupa was the only trade buyer left in the running following the first round. Price and certainty of funding were the factors that sealed the deal, the GP told unquote".

Bupa had been in a strong place to win the bid from the very beginning, Mid Europa said. It added that the company had put together a well-researched, agressive pitch, made sure it understood the market and was willing to pay an attractive price. 

Debt
The debt on the company had decreased from more than 6x EBITDA at the time of buyout to around 3x EBITDA at exit. 

Previous investment
Mid Europa acquired LUX MED from a Cornerstone Partners-led consortium in 2007. The group embarked on a three-stage strategy: in the beginning it pursued an agressive asset aggregation strategy, making more than ten acquisitions, including Medycyna Rodzinna, CM LIM and Promedis. Then it focused on unifying all its assets in terms of IT, administration, appearance and service and later rebranded as its original brand LUX MED. The company also built a new hospital in Warsaw.

Mid Europa in fine invested €100m in the company, more than tripling its original €30m investment. The company's EBITDA grew from less than €2m in 2007 to €30m in 2012, while its turnover increased from €30m to €200m.

Company
LUX MED is a healthcare services company providing outpatient, diagnostic, rehabilitation and one-day surgery care. Under the LUX MED and Medycyna Rodzinna brands, the group jointly operates 72 independent clinics and 24 company-affiliated clinics, offering services to around one million patients.

People
Matthew Strassberg led the investment for Mid Europa Partners.

Advisers
Vendor - Rothschild Healthcare Team (Corporate finance); Linklaters, Tomasz Zorawski, Klaudia Krolak (Legal); PwC (Financial due diligence, tax); LEK Consulting (Commercial due diligence).
Acquirer - White & Case, Rob Irving, John Cunningham, Marcin Studniarek (Legal).

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• Topics
• Exits
• CEE
• Healthcare
• Mid Europa Partners
• Poland
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• PricewaterhouseCoopers