Triton, KKR sell Mehiläinen to CVC

Nicole Tovstiga
18 May 2018

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Triton and KKR have sold Finnish healthcare service MehilУЄinen to CVC Capital Partners and co-investors in a deal reportedly valued at тЌ1.8bn.

It is understood that, following the sale, Triton and KKR's investment in Mehiläinen delivered a return of around 4x to investors.

One press report states the deal could be valued at €1.8bn. According to a source with knowledge of the situation, the figure is based on publicly available data that indicates Mehiläinen reported a €93m EBITDA in 2017, and that EQT-backed peer Terveystalo was most recently valued at around 15.5x.

Lead investor CVC Capital Partners, along with a a consortium of Finnish institutions including LähiTapiola, Varma and Ilmarinen acting as co-investors, agreed to the sale. CVC is investing via its 2016-vintage CVC Capital Partners Fund VII.

Finnish mutual pension companies Varma and Ilmarinen have been minority shareholders since 2015 and will continue to be shareholders alongside CVC. LähiTapiola, a mutual life insurance company, invested in the company in 2016.

With the new PE investor on board, Mehiläinen said it believed being a private domestic non-listed company gives it flexibility and agility to respond to the rapid transformation in the healthcare industry, driven by digitalisation, increasing customer requirements, intensifying competition and regulatory uncertainty.

The deal marks the end of an eight-year holding period for Triton and KKR, which acquired Mehiläinen in March 2010 as joint investors on a 50/50 basis. Under the GPs' ownership, the company continued to grow through investments in new products and services, and developed its position in the Finnish health and social care market.

Mehiläinen is KKR's third Nordic deal in the space of a year. The GP sold Norwegian enterprise software business Visma in June 2017, and acquired a 50% stake in Swedish research, development and intellectual property business Välinge in January 2018.

Previous funding
CapMan invested in December 2000, exiting the firm six years later in March 2006. KKR joined Triton in its investment in Nordic healthcare specialist Ambea, which operated under brands including Carema in Sweden and Mehiläinen in Finland.

Mehiläinen then agreed to buy and merge with rival Finnish healthcare and social services business Mediverkko in November 2014. The combined entity was owned by KKR and Triton alongside management from both groups.

Company
Established in 1909 and headquartered in Helsinki, Mehiläinen is a healthcare service operating medical centres, elderly care centres, child welfare units, mental health rehabilitation units, occupational health centres, and hospitals. It operates a network of 360 units and as a group, and employs a staff of 14,000, including part-time employees.

People
Triton – Peder Prahl (managing partner); Jan Pomoell (investment advisory professional).
KKR – Anders Borg (managing director); Hans Arstad (principal).
CVC Capital Partners – Tomas Ekman (partner).
Mehiläinen – Janne-Olli Järvenpää (CEO).

Advisers
Acquirer – Access Partners (financial due diligence); Avance Attorneys (legal); PwC (corporate due diligence).
Vendors – JP Morgan (M&A).