HBI Deals+Insights / M&A/IPOs

Going international is hard for hospital groups


Vivalto Sante has taken the brave step of going international. That is a bold decision for a hospital business based in a single European country. Very few have succeeded in doing this and those that have have been top players buying top players. We think of Fresenius Helios buying Quiron in Spain, Ramsay buying Generale de Santé in France and then Capio in Sweden, and Mediclinic buying Hirslanden in Switzerland. 

In all three cases the acquirer was buying the largest hospital operator in the country. And both Fresenius and Ramsay have long pedigrees managing international businesses. 

This is not the case with Vivalto Sante. And it has to be said that most national players have struggled to expand abroad. The jury is still out on Schoen’s expansion into the UK. But Penta Hospital’s expansion into Poland and its attempt to build a really large pan-CEE hospital group have spluttered. Famously, Helios Fresenius over a decade ago bought a single Austrian hospital and then retreated back to Germany. Asklepios retreated from California and Greece.

There are many risks. You have to get to grips with a completely different national system of payments, regulations and culture. You have to find synergies which can pay for the cost of acquisition. You have to be better at competing in a new national market than your competitors who have had decades of experience. 

And there aren’t a great deal of synergies to benefit from. The main benefits come from diversification, and economies of scale and most of the scale benefits can be achieved from expanding within a country, if there is still room left to do that.

Expansion in asset-light outpatient sectors is much easier. And telehealth enables a group to expand and build a strong presence in primary care. This is what Helios Fresenius is attempting with Helios Global Health. 

But new digital technologies do have the potential to make managing teams across borders a bit easier by giving managers faster, more up-to-date and accurate information of what’s going on on the ground.

And Daniel Caille, the CEO of Vivalto, has a talented and savvy team. He also has a lot of international experience: he founded Generale de Sante (now Ramsay Sante), which he led in the ’90s when it had operations in both the UK and France (it was split in 1997), and he has opened hospitals around the world, including in Europe, Russia, North America and Latin America.

We are sure he will be harnessing some of these advantages. We will be tracking his progress with interest.

We would welcome your thoughts on this story. Email your views to Martin De Benito Gellner or call 0207 183 3779.