Medical Device Dailys
Two years after selling the family biotechnology business Serono to the Germany-based Merck pharmaceuticals firm for almost €7 billion ($8.4 billion, 2006), the Swiss-Italian billionaire Ernesto Bertarelli has returned to medical investing with the acquisition of Euromedic (Budapest, Hungary) a medical diagnostics and dialysis group.
The Swiss business press seemed to cheer the return of the maverick investor, better known recently for his championship sailing, as his Ares Life Sciences fund together with Merrill Lynch Global Private Equity (MLGPE; New York) emerged as the winners of a hard-fought bidding war for Euromedic.
Sailing teams backed by Bertarelli have twice won the America's Cup for landlocked Switzerland, making him a national hero who also is considered to be one of that country's richest men.
Details of the transaction were not disclosed, but the Financial Times in London reported the deal as valued at 1800 million ($1.26 billion).
The Financial Times also noted the intensity of investor interest in a shift from biotech to med-tech that the battle for Euromedic galvanized.
The previous owners, Warburg Pincus (London) and GE Healthcare (Waukesha, Wisconsin), have recorded a 60% annual return, nearly tripling the return on their initial investment made just three years previously.
Private Equity News, specializing in the European private equity industry, reported five buyout firms "with extensive experience of the sector" dropped out of the bidding war in mid-May, leaving four groups to go on to the second stage for the Hungarian healthcare group.
With revenues doubling in the past year to €284 million ($448 million) and pre-tax earnings of 22%, Euromedic is a fast-growing medical services provider specializing in dialysis services and diagnostic imaging that until recently was exclusively operating in Central and Eastern Europe.
A third of revenue comes from dialysis, while medical imaging and diagnostics contributed more than half of company sales.
Warburg Pincus supported the aggressive expansion of Euromedic from 32 healthcare centres in four countries to 153 wholly owned clinics and care facilities it operates today in 14 countries.
Euromedic contracts with government health insurance funds or hospitals for delivering medical specialties that are capital-intensive, benefitting from the increasing levels of outsourcing by governments to address unmet service requirements.
The company describes its business model for bringing advanced medical care to the emerging countries of that region as "privately funded, publicly trusted, government-backed."
According to the Bucharest newspaper Ziarul Financiar in Romania, where Euromedic owns five centers, the company is investing €40 million ($63 million) over the next 18 months for diagnosis and dialysis centers and adding three PET/CT treatment units.
The newspaper reports Euromedic is increasing its operations budget by 35% in Romania for 2008.
Recently Euromedic demonstrated a potential for greater growth by expanding both vertically, offering new services for laboratory diagnostics and radiotherapy, as well as horizontally, expanding into Western European countries.
The Financial Times reported the company recently won its first contracts in the UK from the National Health Service "and is building on two greenfield sites in south London and one in the Midlands."
The Tribune of Geneva reported that in the fall of 2007 Euromedic acquired three medical imaging and radiology labs in the Valais Canton.
Essilor to acquire Satisloh
In another recent European deal, Essilor (Charenton-Le-Pont, France) and the Swiss company Schweiter Technologies reported signing a share purchase agreement whereby Essilor will offer to acquire the shares of Schweiter subsidiary Satisloh Holding.
The agreement is subject to certain conditions precedent, including approval by competition authorities in Satisloh's main host countries. The acquisition could be completed in the second half of the year.
Created by the merger of Satis and Loh in 2004, Satisloh has a global distribution network and according to Essilor is the world's leading supplier of prescription eyewear laboratory equipment.
It manufactures and markets antireflective coating units and surfacing machines, as well as consumables. The company reported revenues of €161 million in 2007 and has more than 400 employees.
Essilor said the combination of its research capabilities and expertise with those of Satisloh "will make it possible to offer all industry participants a broader, more competitive range of products and services, while shortening time to market cycles for new production processes."
Essilor makes ophthalmic optical products, offering a wide range of lenses under the flagship Varilux, Crizal, Essilor and Definity brands. It operates 15 production sites, 270 lens finishing laboratories and local distribution networks worldwide.
Marketing accord for breast cancer test
Provista Life Sciences (PLS; Phoenix) reported reaching a strategic partnering agreement with International Health Technology (IHT) to release the company's BT Test into the UK and Ireland.
The BT Test, a new blood test to aid healthcare providers in early breast cancer detection, will be provided through IHT's women's clinic for breast health, BreastHealth UK.
PLS and IHT will introduce the BT Test into the UK and Ireland beginning this summer, with a following expanded release to other European Union countries thereafter.
Terms for the licensing agreement were not disclosed.
"The BT Test is an analytical tool that is based on a patient's blood chemistry and is directly associated with the underlying pathology of breast cancer," said Provista president/CEO William Gartner.
The BT Test, or Biomarker Translation Test, finds multiple cancer-related proteins in the blood and combines the results with the patient's medical profile to help identify breast cancer as early as possible.