Advent, GHO could explore sale of intensive care providers in 12-18 months

Neither GHO nor Advent have appointed advisors yet, said the sources plus a further source familiar. Linimed is tipped for a 2023 sale process, said one of the sources, with another saying it could come to market in 12-18 months.

A similar timeframe is expected for Deutsche Fachpflege, said two of the sources. Advent has not yet made plans around an exit, said a fifth source familiar with the situation.

Both companies offer a wide range of services of intensive care that aim to treat patients out of the hospital, often in their own homes. This includes ventilation management, wound care and other one-on-one medical services after accidents, illness and through disability.

The exits are expected to follow that of peer Opseo, after its sponsor Ergon appointed Goldman Sachs to oversee a process expected to launch post-summer, as reported by Mergermarket. Opseo is likely to be marketed off around EUR 60m-EUR 70m EBITDA, as reported.

Linimed recorded an EBITDA of around EUR 12m-EUR 13m when it was acquired by GHO in 2018, said one of the sources, with another adding that it records around EUR 11m EBITDA and EUR 60m sales.

The company generated FY20 EBITDA of EUR 10.6m and sales of EUR 67.5m, up from EUR 6m and EUR 53m respectively, according to public filings. The group’s goal is to grow sales by 97% and EBITDA by around 80% with new sites and additional acquisitions, it states.

Linimed could sell for 12-13x EBITDA, said one of the sources.

Deutsche Fachpflege is the largest player in Germany and is expected to generate EUR 70m EBITDA, said two of the sources. The asset generated FY20 EBITDA of EUR 40m and EUR 391m in sales, up from EUR 16m and EUR 337m respectively, according to public records.

Advent acquired Bonitas to bolt it on to Deutsche Fachpflege in 2019, as reported.

GHO acquired Linimed in 2018 at a touted valuation of over EUR 170m, as reported. Advent was the reported frontrunner in the Rothschild-led process in a bid to merge it with Deutsche Fachpflege, which it acquired a month earlier.

The process for Linimed is expected to appeal to both strategic and financial bidders, especially those that already own similar assets, said two of the sources. EQT, Montagu, Oakley, Eurazeo and Triton could all look, added one.

A large-cap private equity fund could look at buying and merging any of the three assets coming up for sale, said one of the sources.

The German outpatient market is already very concentrated and multiples are starting to go down, said one of the sources, adding that there are also questions around how long the German government will provide subsidies to prop up a pandemic-driven fall in occupancy rates.

Linimed has executed two larger bolt-ons in the past 18 months and has been focusing on integrating those to show some synergies, said one of the sources, adding that there is an M&A pipeline focused on smaller deals.

Advent declined to comment. GHO, Linimed and Deutsche Fachpflege did not respond to a request for comment.

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