Montagu appoints advisers to sell ophthalmology group Artemis

The vendor will likely see a process launch after the summer, a third and a fourth source familiar said. No formal decision has yet been made on timing, one of the sources said.

The company, which Montagu has owned since 2015, was tipped as a 2020 sale candidate, as reported, At the time, its price tag was approaching a EUR 1bn valuation.

Artemis, which has pursued an aggressive M&A roll-up strategy, has EBITDA of EUR 55m-60m, depending on the adjustments, according to a fifth source familiar.

Rivals Veonet and Sanoptis have both recently sold for 15x EBITDA multiples, as reported, and owner Montagu will be looking for a mid-teens price tag, said a sixth source familiar.

In 2020, Artemis saw a 27% jump in revenue to EUR 179m alongside a 32% rise in EBITDA to EUR 33m, which it puts down to M&A, according to its most recent filings. That year, it carried out 161,000 operations, including 58,000 for cataracts.

For FY21, it forecasts revenue growth in the "lower" double-digit range and a "slightly disproportionate" increase in EBITDA, the filings state.

The company has slowed down its aggressive M&A activity in the past few months and its performance is slightly behind Veonet and Sanoptis, said one of the sources, adding that it had severe operational issues in Hamburg and with its latest add-on, AOB.

A tie-up between any of the top three companies has long been rumoured and is still not off the cards, one of the sources and a banker tracking said, although it may be more difficult with Sanoptis due to its philosophy of including doctors in its share structure, said one of the sources.

Antitrust would not prove an issue, said one source, as Artemis and Sanoptis combined would take up 20%-25% of the German market. Although another adds that the government is also starting to grow weary of private equity involvement in healthcare, which could also affect the ongoing process for local psychiatry company Oberberg.

The ophthalmology market, in general, is starting to suffer from a glut of consolidators and many players in the market know that there are not that many add-ons left to do, the banker said, adding that there are lots of single clinics left but these are difficult to acquire.

Montagu acquired the asset from G Square in 2015, fending off competition from Nordic Capital in an auction led by William Blair. At the time, the company had an EBITDA of EUR 15m-EUR 20m against revenues of around EUR 50m.

Nordic Capital instead ended up acquiring Ober Scharrer, which rebranded as Veonet after a host of international acquisitions, including the UK's Spa Medica and Dutch peer Eyescan, among others.

The sector's two largest assets have traded in the past six months. In November, Nordic sold Veonet to a consortium of PAI and OTPP, while last month Telemos Capital sold Sanoptis to GBL.

Montagu, HSBC and Goldman Sachs declined to comment. Artemis did not respond to a request for comment.

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