ECONOMY

Hygeia eyeing acquisitions for expansion

Greek healthcare group Hygeia is planning new acquisitions within a year to cash in on growing demand for private medical care in the Balkans as state-run hospitals fall behind. The group, 32.8 percent-owned by buyout group Marfin Investment (MIG), raised 300 million euros via a convertible bond to finance expansion at home and abroad as poor public healthcare systems turn people toward private care. Hygeia’s chief executive said yesterday the group will use about 245 million of the proceeds to expand in Southeastern Europe, either through acquisitions or by setting up new healthcare units. «We hope that about 150 million euros from the bond loan will be invested in the next 12 months,» Hygeia’s CEO Themos Charamis told Reuters in an interview. «The countries we are interested in are in Southeast Europe and the Mediterranean.» Last year the group fully acquired Greece’s second-largest private maternity clinic Mitera. Recently, it clinched deals to buy two private hospitals in Cyprus and a 50 percent stake in Turkish healthcare group Safak. Hygeia, which means «health» in Greek, also plans to invest some 40 million euros to build the first private clinic in Albania by 2010, the CEO said. A continuous shift toward private healthcare services due to rising living standards and poor public services along with an aging population and higher life expectancy are expected to feed the group’s profitability in the next 10 years. Market shifting In Greece, spending on state and private healthcare comes to around 20 billion euros or 10 percent of the country’s gross domestic product (GDP). Private healthcare services are growing at double-digit rates. «This shift is ongoing, because the state healthcare system is not improving. At the same time, the number of people privately insured is rising, which means an increasing influx of patients to private hospitals,» Charamis said. Charamis sees further room for growth in Greece, as the healthcare business is fragmented with many small-size clinics offering insufficient services. «We expect that small-size private clinics will gradually begin to close down or be forced to merge with larger facilities,» he said. Charamis said the group may issue another bond for 200 million euros after 2009 as shareholders have already given their green light. He said a restructuring program at Hygeia is targeting cost savings and will boost net profit this year, despite interest expenses of about 20 million euros on the convertible. Sales are forecast to double, mainly thanks to recent acquisitions, he said. Last year, Hygeia had net profit of 12 million euros on sales of 130 million. (Reuters)