CVC enters into a binding agreement to acquire IASO General Hospital

On November the 6th, CVC Capital Partners announced the signing of a binding agreement to acquire private hospital IASO GENERAL through Hellenic Healthcare Sarl, an entity controlled by funds advised by CVC. The transaction is subject to customary terms and conditions including due diligence and approvals.

IASO General Hospital is one of the leading full-scale private medical providers in Central and Northern Athens with 239 beds, 20 ICU beds, 11 surgical suits, 500 skilled employees and over 500 collaborating doctors.

IASO General is a subsidiary of Athens Exchange listed IASO Group SA, whose other main activity is one of Greece’s most successful maternity clinics. The group has been is facing a high debt burden following an aggressive expansion during the period before the crisis.

The transaction although expected 19m€ cash positive for the seller, still leaves IASO SA with remaining net debt level of over 100m€, which some analysts consider non-sustainable and in need of restructuring. IASO Thessalias, with debt of over 48m€ remains the IASO’s main problem subsidiary.

This deal is the second major move of CVC Capital in the Greek private healthcare sector, after the majority acquisition of the Metropolitan Hospital, one of the largest private hospitals in Greece in April.

CVC has invested significantly in healthcare and particularly in the private clinics sector of Europe in the recent years (including Spain, France and Italy). The market of private health services is at the heart of investment interest, as the degradation of the public health system turns part of the population into private nursing homes. Much of this shift is through insurance companies, which represent a significant part of the revenue of private clinics.

At the same time in Greece, the continued application of “rebate and clawback” system on public healthcare spending coupled with the delay in government debt collection and bank financing difficulties create problems in the liquidity of Greek SMEs thus shaping the conditions for the entry of international investors.