Reflections on 2022 – deals and delays, revolts and reform
As 2022 comes to end, it seems appropriate to look back at some of the winners of the last year – and those who fared less well in a trying environment.
A global staffing shortage, waiting lists, the cost of living crisis, spiralling energy costs and inflation all combined to give pause for thought. So who hit HBI’s headlines for the right – or the wrong – reasons? And were there still deals to be done?
One elderly care group hit the headlines from January – and pretty much every month thereafter – for the wrong reasons. French giant Orpea was pilloried following the publication of a damning book alleging malpractice, and it was subsequently targeted by investigations, both internal and external. The group’s new management has distanced itself from its predecessor and is fighting a strong rear guard action and – despite a recent shareholder revolt – must be hoping for calmer seas in ’23.
Sector wise, despite a somewhat hostile climate throughout most of ’22, which saw many deals go quiet, get delayed or abandoned (Mehilainen, Oberberg, Artemis Augenkliniken to name but three), fertility was hot to trot in ’22. In February alone, CARE Fertility, IVI-RMA and Virtus Health all hit the headlines for the right reasons – big money sales.
Other deals looked to be on, then off, then on again. By April KKR had begun its will-they won’t they dance with hospital group Ramsay in a courtship which didn’t, quite, come to fruition. KKR withdrew its initial big money offer for a second which Ramsay deemed “inferior”. Less than stellar results and Ramsay’s French connection may have proved too much to overcome.
But dentistry was in favour, with sales for Dental Partners (to Rodericks), and Dentex (to Portman). This should continue into next year, with an ongoing process for European Dental Group very much on, as sellers Nordic have assured us.
Ophtha was a little quieter but UK, Czechia and Poland-based ophthalmology group Optegra found a buyer last month in PE firm MidEuropa, despite reports the deal might be floundering.
The year’s eye-catching deals included the South Africa-based multinational hospital giant accepting a £3.7bn bid for Mediclinic from a consortium comprised of Remgro, the investment vehicle of the billionaire Rupert family and a long-time Mediclinic shareholder, and the Mediterranean Shipping Company (MSC) back in August. Why a shipping company? Why not? Perhaps having seen Maersk owner A.P. Moller’s investment in lab giant Unilabs late in 2021, it recognised in trying times, healthcare is as good, if not a better investment, than most and followed suit.
Also splashing the cash over in the States was Amazon with a series of bids and buys, including the acquisition of US primary care chain One Medical for a cool $3.9bn. Few would bet against Amazon not to splash more of its substantial cash reserves in the coming year and the competition may not welcome a group plainly unperturbed by investing capital at a short-term loss for an uncertain long-term gain.
And what about geographies? When it comes to countries, a lot of the chatter over the last year has centred around Germany and Saudi Arabia. Germany has been planning the most substantial healthcare reforms in memory, and you can read more about those elsewhere in this week’s edition. Despite the push away from hospitals to inpatient and restrictive ownership rules (which could be further tightened as Deals+Insights members read last week), the sheer size of the market continues to make it hugely attractive.
That said, Swedish digital healthcare start-up, Kry found itself withdrawing from Germany this year. It didn’t look all smooth sailing for digital health companies across Europe in ’22 with Kry laying off 20% of its staff in two separate layoffs and Babylon’s shares down over 90% since IPO as it looks to the USA for success.
Meanwhile in Saudi, its $13bn private healthcare expansion has pulled in groups taking a punt on PPP with tantalising promises of medical cities and foreign investors being positively courted.
As for next year, HBI is pausing – briefly – over the Christmas period and will have a round up of predictions for its members as we head into 2023 in two week’s time. If you would like to share your thoughts and hear what others are saying, we’d love to hear from you. Email david@healthcarebusinessinternational.com, or call us on the general office number and ask to speak to editorial.
We would welcome your thoughts on this story. Email your views to David Farbrother or call 0207 183 3779.
