Saturday, September 17, 2011

Carlye Bids on Swiss Hospital Chain

London South East reported:

Private equity firms Advent International and Carlyle Group are the last two remaining bidders for Swiss-German private hospital operator Ameos, sources closed to the deal said on Friday. 
Ameos, formed in 2002, operates 48 private hospitals and psychiatric clinics, mostly in Germany.

A club of banks are working on arranging senior loans for the potential leveraged buyout, with the debt expected to amount to around 4 times the company's 45-50 million euros ($62-469 million) earnings before interest tax depreciation and amortisation (EBITDA).  

This would be Carlyle's fourth hospital company, following LifeCare (U.S. -LTAC), Healthscope (Australia), and Medical Park Group (Turkey).  Carlyle also owns HCR ManorCare, a huge nursing home provider.  The Carlyle Group monetized ManorCare's physical assets and looks to cash in on the rest of the company, as well as Medical Park later this year.

The club of banks might want to read about CIT's PEU experience: WSJ reported:

CIT Group Inc. (CIT) is looking to rid itself of a $1 billion commercial loan portfolio.  The portfolio, which is being shopped by Houlihan Lokey Inc., comes from a problem loan book, although a number of the loans are making payments on schedule.

Most of the portfolio that CIT is selling consists of senior secured loans, with some junior secured loans, these people said. The loan positions are in about 72 companies, including ones sponsored by private equity firms, such as Welsh Carson Anderson & Stowe, Carlyle Group, MidOcean Partners and Thomas H. Lee. 
How much will European healthcare costs go up because of the deal?  U.S. health care costs rose over $2 billion annually when HCA sold out to KKR and CHS purchased Triad Hospitals.  White House Health Czar Nancy-Ann DeParle received $1.4 million for her Triad shares.

Privatization brings opportunity.  PEU's are happy to take government cash, but hate paying taxes. Somehow their management fees, partially paid by U.S. Medicare and Medicaid, are taxed as carried interest.  The racket continues, only globally.