BC and AXA's Medica set to become latest listing

Francois Rowell
03 February 2010

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French care home business Medicaтs flotation could be a sign that the IPO market is in rude health.

BC Partners- and AXA Private Equity-backed care home specialist Medica, which has been rumoured to be on the verge of going public since the end of 2009, will finally be listed on Paris Euronext next week. The deal would value the business at between €1-1.1bn, including €332m debt – equivalent to 13x the company's EBITDA.

The float, which is France's first in more than a year, is the second announcement of a major private equity IPO in as many days, coming as it does on the back of the announcement by Apax-backed New Look yesterday. Following what can conservatively be described as a wobbly year on the public markets, perhaps predictions that 2010 will be the year of the IPO will bear fruit after all.

Any confidence, however, must be tempered; after a flurry of GPs announced their intentions to list their portfolio companies, many balked in the face of pricing volatility and began running dual-track processes. Subsequently, previously IPO-bound Pets at Home was sold by Bridgepoint to KKR last week, while CVC, Carlyle and BC Partners are openly courting Kabel Deutschland, which had been seeking to float.

SBOs appeared to be stifling any IPO resurgence; the Medica news is therefore timely.

BC and AXA will float the business on 10 February, listing an initial 15.6 million new shares, 35.6% of the total, while an over-allotment option could take this share to 41%.

Medica is initially seeking to raise around €275m, with the price per share, which is expected to be around the €16-20 mark, finalised on 9 February. Predica, an insurance division of Crédit Agricole, has committed to purchasing a €40m stake in the company.

The capital increase will be used to cut the company's debt, as well as to fund ongoing expansion efforts. BNP Paribas, Credit Suisse and Royal Bank of Scotland will be acting as book runners.

Medica was founded in the 1980s through a merger of smaller retirement home businesses, under the direction of the Caisse des Dépots et Consignations. It was acquired by its current owners in September 2006, ironically following a dual-track process and a last-minute decision by Medica's previous owners, Bridgepoint, to cancel the firm's planned IPO.

Over the last three years, the company has completed 36 add-on acquisitions, representing 148 homes. Medica is the third largest care-home group in France behind Opea and Korian.

BC Partners is hoping to list two more of its portfolio companies this year: Germany-based Brenntag, a chemical company, and Spain-based Amadeus IT Group, a travel reservations firm. The investor is also thought to be planning to raise a new €8.4bn fund.