Update 3 August 2021
I hope that you are in a place where the weather is treating you well (not too hot, no fires, not too much rain, etc.). Here in the Netherlands, we are having a very wet summer so far, but I am shortly off to sunny Italy.
In this update we cover:
- Acquisition of Equipe finalized. Who will be the next private equity target in the Dutch healthcare market?
- Bergman acquisition of Mauritskliniek faces opposition. What happens if the takeover is refused?
- Buurtzorg agrees multi-year contract with final healthcare insurance company. Will multi-year contracts become the norm?
Nordic Capital is new owner of Equipe
Rumors relating to a potential sale of Equipe have been making the rounds for a few months. The company is very successful in the Dutch market with 30 locations, 700 employees (including 130 medical doctors) and more than 110.000 completed treatments in 2020. Some potential buyers reportedly saw Equipe as a “cleaner version” of Bergman Clinics with a similar strong position in the Dutch market but without any “baggage” of rapidly thrown together international acquisitions.
Last week it was announced that GIMV has sold it shares in Equipe to Nordic Capital. Nordic Capital has considerable expertise in the healthcare sector and will assist Equipe in the next stage of its development to an international company. With the sale of Equipe and Eurocept Homecare GIMV has carried out a major housecleaning of its healthcare assets. Will it look for new Dutch-based healthcare assets? This is also the third large investment by an international PE-company in the Dutch healthcare sector (after Bergman Clinics and Mentaal Beter). What will the next target for the international firms?
Bergman Clinics not allowed (yet) to acquire Mauritskliniek
In January it was announced that Bergman Clinics was to acquire Mauritskliniek, a Dutch specialty clinic with five locations and annual revenues of €12.5 million. All acquisitions in the healthcare sector need to be approved by the ACM (the Dutch anti-trust and competitor watchdog). The ACM recently announced that it is not automatically approving the acquisition and that Bergman Clinics must apply for a license to go through with the acquisition.
The reason for the ACM to have concerns about the acquisition is data showing that Bergman tariffs increased more than those of comparable clinics and hospitals after the merger with NL Healthcare Clinics in 2017. In addition, insurance companies are unhappy with the very strong market position that Bergman is developing in the Dutch market.
If the ACM does not allow the acquisition, it will mean that we are entering a new era in the development of the Dutch hospital and specialty clinic sector as market power becomes a defining factor in the further consolidation of the sector. It will make it more difficult for Bergman to further develop its Dutch market position and opens the market for other players such as Equipe. It will be interesting to see what Bergman will need to do to be allowed to buy Mauritskliniek or who the alternative buyer will be.
Buurtzorg signs multi-year contract with CZ
Buurtzorg is the largest provider of medicalized homecare in the Dutch market with 10.000 nurses working in independent teams. In an update from 2018 we explained that Buurtzorg had signed a multi-year contract with a large healthcare insurance company (Menzis). In the following years Buurtzorg has managed to sign multi-year contracts with all the major insurance companies except for CZ. Buurtzorg and CZ disagreed on key issues such as specialization in homecare. CZ believes in specialized teams for issues such as wound care and dementia, while Jos de Blok (CEO of Buurtzorg) strongly believes that generalized teams are more effective and keep job-satisfaction with nurses high. Apparently, Jos de Blok has managed to convince CZ to agree with his viewpoints (or Buurtzorg is so large that CZ must have a contract with the company) as the two companies have now signed a three-year contract with a total value of almost €200 million.
In the new contract CZ and Buurtzorg have agreed to focus on three key themes. The most important theme is to make homecare nursing attractive in a tight staffing market by allowing nurses to carry out a broad range of activities. Furthermore, Buurtzorg will play a key role in meeting the overall goal of CZ to move healthcare activities from hospitals to the home of patients. Buurtzorg will also continue its work to reduce the demand for homecare by 20% by implementing E health solutions and transferring activities to the patient and family.