Update 7 December 2021

I hope that you are doing well. Here in the Netherlands Sinterklaas has been celebrated and now all the shops are focused on Christmas. In the healthcare sector most of the attention has been focused on the new omicron variant and capacity issues related to COVID19. Other healthcare related news from the Netherlands includes:

• Onzorgd Wonen Groep is bankrupt. Are there more commercial nursing home providers at risk?
• DC Klinieken acquires small chain. Will there be more consolidation in the specialty clinic market?
• In our snapshot we give an overview of De Vijf Meren Kliniek, a chain of specialty clinics focusing on EMT

Ontzorg Wonen Groep is bankrupt

Ontzorgd Wonen Groep (OWG) has a long and turbulent history and has operated under several names. We have developed snapshots of the company as SAOW, ECR, and Ontzorg Wonenen.   We have also written about OWG in July 2019 when the, already then, troubled group claimed to have found new financing. In February 2020 we described how OWG had sold two thirds of its locations to Korian, but we also raised issues concerning their continued viability.

Last week it was announced that the company has entered receivership. At the end, OWG had four locations and approximately 250 clients. According to the receiver, it also had €55 million in debts, including €5 million owed to the tax authorities. The company does not have any real estate, as this has already been sold to investors. According to the receiver fifteen companies have expressed interest in acquiring the operations at the four locations.

The problems of OWG started in 2018 when the company (then known as The Blueprint Group) acquired the assets and operations of bankrupt ECR for €1. ECR was a strange mix of operations and assets and had quality issues that OWG has not managed to improve. At the end it is clear that the combination of only 250 clients, a bad reputation for quality (including large fines from the government), and a debt of €55 million was a recipe for disaster.

While the Dutch elderly care sector has excellent growth opportunities and a favorable financing system, this bankruptcy clearly raises alarm signals about the financial health of other commercial nursing home operators have grown rapidly through acquisitions.

DC Klinieken acquires MCV

DC Klinieken is a chain of thirteen locations offering a fairly broad range of services (including gastrointestinal care). DC is much smaller than Bergman Clinics or Equipe, but is one of the larger “second division” players in the Dutch specialty clinics market. DC Klinieken is owned by Loek Winter and Rabo Private Equity. DC Klinieken has recently acquired MCV Nederland. MCV has two locations also focused on gastrointestinal care.

MCV Klinieken has been looking for a partner (probably in order to improve its negotiation position with the insurance companies). As further acquisitions by Bergman and Equipe are likely to raise antitrust issues and make the insurance companies unhappy, DC Klinieken was a good choice. From the viewpoint of DC Klinieken it is definitely useful to grow as this further improves their positioning with the insurance companies and also makes the company more attractive for new investors. We can probably expect more acquisitions.

Snapshot of a commercial Dutch healthcare company : Vijf Meren Kliniek

De Vijf Meren Kliniek is a chain of eight specialist clinics with a tight geographic focus in the towns to the south-east of Amsterdam. The eight clinics are all focused on ear, nose and throat (EMT) treatments. The company is closely aligned with the local general hospital (Sparne Gasthuis) and three of the treatment centers are found in hospital locations. One other location is based on the occasional hire of an operating room at a Annotommie location. The Vijf Meren Kliniek had 2020 revenues of €9.1 million.