Deal making in private health sector
The private health sector is buzzing with a number of business plans for expansion and mergers and acquisitions afoot, although some of the advertised plans seem destined to fall through. A few days ago, two doctors who are also shareholders in the Iaso General Hospital (the former Hera maternity clinic and a subsidiary of the Iaso clinic), Panayiotis Filalithis and Spyros Tzanis, along with other businesspeople, bought out listed textile company Cor-Fil. The acquisition came as the company, which is little more than an empty shell now, was about to be delisted from the Athens Stock Exchange. Cor-Fil will be used as a vehicle to introduce Iaso General, and possibly other healthcare firms, on the stock market. As a side effect, the move also helped thousands of small shareholders who were about to lose their investments. The move by Filalithis and Tzanis shows the major role played by doctors in the business plans of the private health sector. After all, doctors are among the major shareholders of private clinics, being the people who usually found them. Doctors may not be finance professionals but often rake in huge profits from deals. Another team of doctors recently invested -40 million to found the Philoctetes treatment and rehabilitation center, thus filling a large hole in the healthcare system. Philoctetes opened a couple of weeks ago, and the owners’ plan is to introduce treatments and services found in countries with a long history of expertise in rehabilitation, such as Britain, Sweden and Switzerland. These include preventive medicine, pain relief and sleep therapy, but also the general maintenance of healthy bodies, as done at so-called health farms. Another investment project by doctors, this time worth -60 million, involves a maternity clinic, the Rea Maternity Hospital, and is being implemented in Athens’s southern suburbs, near the site of the former racetrack on Syngrou Avenue. Ownership will be spread among several shareholders, and the clinic is expected to attract doctors from other private maternity clinics in Attica. Excavation for the hospital’s foundations is expected to start by April 15, on an 18,000-square-meter plot, and the maternity clinic is expected to begin operations 20 months hence. Rea’s owners plan to offer competitive rates to attract clients. An effort by long-established private clinic Hygeia to set up its own maternity hospital in the southern Athens suburbs, in Voula, has foundered despite an agreement with the Red Cross’s Greek chapter. The deal, said to be worth -100 million, is to build a new building for the Asclepeio Hospital and to use facilities within that plot of land or beyond it. Despite the Marfin Group’s presence in the project, as the provider of finance, the plan fell through. Marfin, the owners of a 25 percent stake in Hygeia, also have to deal with the merger of the Mitera and Lito maternity clinics. Plans for the merger have fallen afoul of the doctors employed there (not the shareholders) who fear a loss of jobs. Some doctors, especially former Lito employees, have moved to other private maternity hospitals and many more have declared themselves open to offers. The listed Iaso maternity clinic, where shareholder ownership is more dispersed compared to other private clinics, has so far resisted offers of acquisition. Last week, Iaso shareholders were not pleased to learn that Euromedica, whose designs for a takeover have long been known, had acquired 5.1 percent of Iaso, thus becoming its largest shareholder. No other shareholder owns over 2 percent, but a very tightly knit group of doctors exercises effective control over ownership. Iaso also plans to build a clinic in the southern suburbs, but this project is not going to be implemented anytime soon. Euromedica acquired its stake through a foreign institutional shareholder. Euromedica’s acquisition surprised the market, which did not believe that the clinic, controlled by businessman Thomas Liakounakos, had the capital to pull it off, mainly due to its past failure to attract a strategic partner. However, Euromedica has a strong presence outside Athens with clinics and diagnostic centers. It plans a -100 million capital increase by next month.
