Hg buys Medifox from ECM

The sale ends a five-year holding period for ECM, which acquired the business in May 2013. The GP drew capital from Germany Equity Partners IV, a €230m buyout fund that held a final close in June 2012 and was reporting net IRR of 33% as of February 2018.

It is the second investment from Hg Capital Mercury 2, a £575m buyout vehicle focusing on the northern European lower-mid-market.

Hg won out against KKR, Montagu and TA Associates in the second round of the auction run by GCA Altium, according to a report by Unquote sister publication Debtwire. The report quoted sources that expected an enterprise value of up to 20x the company's run-rate EBITDA of €16m.

Under ECM's ownership, the number of people employed by Medifox has increased from 157 to 265 and it now has 6,000 clients, up from 5,000 at the time of the investment.

Debt
Ardian Private Debt and EQT Credit provided a senior secured financing solution to support the acquisition.

The unitranche facility was around 6x the projected €16m EBITDA, according to Debtwire, implying a debt package of €96m.

Previous funding
ECM acquired a majority stake in MediFox in May 2013. The company's management team invested in the deal for a significant minority stake.

Company
Founded in Hildesheim in 1994, MediFox develops software for use in care facilities, as well as to service elderly outpatients. Applications include resource planning, documentation, quality assurance and invoicing. BFS Abrechnung, the second-largest invoicing and factoring service provider in the German nursing care sector, is also part of the MediFox group. The business currently has around 6,000 customers and employs 265 people.

People
Hg – Stefan Margolis (director).
ECM Equity Capital Management – Axel Eichmeyer (managing director).
MediFox – Christian Städtler, Thorsten Schliebe (managing directors).

Advisers
Vendor – GCA Altium (corporate finance).

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• Topics
• Exits
• Buyouts
• DACH
• Healthcare
• Technology
• Germany
• ECM Equity Capital Management
• HgCapital
• Secondary buyout