Biggest private hospital in Athens for sale
Red Cross-owned Henry Dunant hospital, which claims to be the largest private hospital in Athens, is for sale. How tempting a target does it make at a time of severe crisis?
The circular for the sale from consultants PWC estimates that the private hospital market in Greece came to €1.2bn in sales in 2012. This is after a 13.5% decline in market size in 2010 and an 11% decline in 2011. It claims that the 77 largest private hospitals have seen average EBITDA decline from 15% in 2009 to 7.2% at the end of 2011.
Given that the economy is still contracting, government is still making deep cuts to spending and private medical insurance is declining, there’s reason to believe that the private hospital market will continue to shrink in the short-term, although top player Hygiea actually saw sales rise slightly in late 2012.
Add in to that the fact that payments from the public system are being delayed by years in some cases, as well as the difficulty inherent in securing debt, and acquisitions look difficult right now.
But Dunant is the biggest hospital in Athens. The hospital contains 462 beds and employs 1,063 staff.
It is also a disaster. The hospital’s occupancy rate fell to 24.9% in 2012, from 37% in 2012. The average among the big players was an admittedly anaemic 45.9% in 2011. EBITDA has been negative since 2009, and is currently at -33.6% on sales of €24.7m – down from sales of €96.5m in 2009.
Could that make it a bargain purchase? Top operators may still be interested: despite woeful performance, Dunant still accounted for 4.3% of the private hospital market in 2011. That’s a big slice for top players Athens Medical Center, Hygeia, Euromedica, Perseus and Iaso, who have watched while consolidation in the Greek market has slowly decreased since the recession first hit – small operators have gone from claiming 34.1% of the market in 2007 to 49% in 2011.
Our Analysis: Will Henry Dunant find a buyer? Much depends on whether the Greek government finally pays its debts to the private sector. Everyone is waiting on tenderhooks to find out.
We would welcome your thoughts on this story. Email your views to Max Hotopf or call 0207 183 3779.
