Ergon readies Opseo for exit advised by Goldman Sachs

Patrick Costello , Joao Grando and Rachel Lewis
25 July 2022

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Opseo, a chain of German outpatient intensive care clinics, is being prepared for sale by owner Ergon Capital later this year, three sources familiar with the situation said.

The Luxembourg-based sponsor has tapped Goldman Sachs to advise on an auction that could kick off after the summer, the sources said.

Opseo is tipped to be marketed off around EUR 60m-EUR 70m adjusted EBITDA, two of the sources said, with another source suggesting non-adjusted EBITDA is closer to EUR 45m.

Financial sponsors are expected to look at the asset, two of the sources said. Buyers interested in consolidating the outpatient intensive care space in Germany might find Opseo an attractive investment as there is potential to combine it with similar private equity-backed assets, one of the sources said.

Comparable sponsor-backed assets in Germany include Linimed, an outpatient care service provider owned by GHO Capital Partners, and Advent-backed Deutsche Fachpflege.

While Opseo is a difficult business and vulnerable to inflation, as it consists of several small facilities employing a large number of nursing staff, it will nonetheless draw attention from bidders due to its size, another of the sources said.

Nursing homes operators are one strategic buyer that historically would have been interested in this kind of asset but may find it more difficult in the current market, the same source added. Deal flow in the social care remains low partly from the fallout from the allegations of negligence at French nursing home operator Orpea [EPR:ORP] and resulting investigations. The sector is also partly still impacted by the pandemic and faces challenges in sourcing labour and sees low margins from limited public pay, as reported.

For FY21, Opseo forecasted EUR 38.1m adjusted EBITDA before acquisitions, according to its most recently available filings. It also expected revenue growth in FY21 of more than 15% before M&A, in addition to further sales growth in the "double-digit" percentage range through new acquisitions. The company expects demand and revenues to rise in the coming years due to the increase in patients in need of intensive care, according to its filings.

In FY20, Opseo reported EUR 23.3m EBITDA on the back of EUR 169.5m revenue and said adjusted EBITDA amounted to EUR 31.6m, the same filings state.

Ergon acquired Opseo, then known as Deutsche Intensivpflege Holding (DIH), in 2016 for an undisclosed sum, according to Mergermarket data. Opseo generates EUR 220m sales, according to Ergon's website.

Under Ergon's ownership, Opseo has completed a number of add-ons in its sector, acquiring German intensive care providers Ambulante Intensivpflege Holding (AIH) and Balu Kinderintensivpflegedienst in 2022.

Last year, Opseo made five add-on deals according to Mergermarket data, including of Germany-based intensive care service providers Aercura; Hamacher Gesundheitsdienste; IPD-MV; Kidi; and Binder Intensivpflege.

Founded in 2013 and headquartered in Kelsterbach, Opseo is a specialist care group focusing in out-of-hospital intensive care made up of medium-sized care companies across Germany, according to its website. Its more than 5,000 employees look after 1,400 intensive care patients of all ages throughout Germany at home and in outpatient assisted living communities and inpatient care facilities.

Goldman Sachs declined to comment. Opseo and Ergon did not respond to requests for comment.