The leading private medical chains InMedica and MediCA Group have completed the largest merger in Lithuanian healthcare clinic history to date.
Kęstutis Broniukaitis, Founder and CEO at InMedica, commented:
“Through our network of 70 clinics, which is the widest in Lithuania, we are in the closest proximity to our customers, who are offered a wide variety of health care services. Today, we have 2,700 highly qualified specialists working in 20 Lithuanian cities, assisting patients every day. Despite our leader status, combined revenue approaching €90m, we remain a small player in a €3bn healthcare market post-merger. While we serve 7% of the Lithuanian population, our market share in terms of revenue is only 3%. State-owned clinics have made significant investments in recent years into improving service quality, and simultaneously, new clinics are actively being opened by private players. We aim to continue this trend of being highly competitive in terms of both service quality and accessibility while also being an attractive place of work for doctors and healthcare professionals alike.”
According to InMedica’s CEO, the next chapter of growth will focus on improving service quality, including the continued purchasing of modern state-of-the-art equipment, the development and refurbishment of premises at existing locations, upgrading overall IT capability and customer satisfaction management functions.
Post-transaction, one of the largest Baltic private equity funds INVL Baltic Sea Growth Fund (through its special purpose vehicle “BSGF Sanus”) remains the largest shareholder with an ownership stake of 45% of InMedica shares, 40% is owned by the largest Latvian private medicine group Repharm and the remaining 15% is held by Lithuanian company Litgaja (the holding company of founder and CEO Kęstutis Broniukaitis). The business will be managed by a joint management team made of MediCA Group and InMedica professionals.
Nerijus Drobavičius, Partner at INVL Baltic Sea Growth Fund, commented:
“The core mission statement of INVL Baltic Sea Growth Fund, our private equity platform, is to provide capital support and operational expertise to local companies to help them achieve their ambitious strategic growth plans. We invested in InMedica back in 2019 when the company was generating ~€10m in revenues. We are, therefore, pleased that after only 3 years of working alongside founder and CEO Kęstutis Broniukaitis, together we have significantly increased the number of active clinics practising, both organically and through bolt-on acquisitions, and now managed to agree with Repharm, the most successful healthcare group in Latvia, to merge our Lithuanian businesses. We are confident that this partnership will ultimately lead to more services being offered to patients.”
Stella Lapina, Chairwoman of the Board of VCA, healthcare services arm of AS Repharm, believes this is a new boost to the healthcare sector following the adverse effects of the pandemic. It will increase the quality of services to patients, overall efficiency, and make healthcare better accessible to local communities, including those in underserved and remote areas. Furthermore, the partnership with a leading and the most successful private equity fund in Lithuania, in the form of INVL Baltic Sea Growth Fund, will enable a substantial increase of investment into service improvements and new clinic openings.
According to MediCA Group director Aleksejs Tjurkins, “the consolidation of MediCA Group and InMedica will give an opportunity to provide higher quality service for people all over Lithuania as well as to speed up development of new areas in medicine.”
This complex transaction was financed by Luminor bank. “The pandemic has made us appreciate the importance of access to high-quality healthcare services even more. Therefore, we are pleased to support the expansion of MediCA and InMedica groups in the Baltic market with funding to promote the access to professional and high-quality medical services, thereby contributing to improving the health of the Baltic population,” says Andrius Načajus, Head of Corporate Banking division of Luminor in the Baltic States.
A merger of two leading private medicine networks InMedica and MediCA Group that took 1.5-year to complete would not have materialised without professional assistance on both sides of the deal. InMedica was represented by TGS Baltic (legal), Deloitte (financial) and Copenhagen Economics (consulting). MediCA Group was represented by Baltic Partners (M&A advisory), Cobalt (legal) and RM Legal (legal). The process as a whole was overseen by the Competition Council of the Republic of Lithuania and Competition Council of the Republic of Latvia, with advisory services from Hortus Investment Banking, Greenlex, Konrema and Spigulis & Kukainis.
INVL Baltic Sea Growth Fund
INVL Baltic Sea Growth Fund with its total size of €165m is the leading private equity fund in the Baltics with the European Investment Fund (“EIF”) acting as its anchor investor.
The EIF has committed €30m with the support of the European Fund for Strategic Investments, a key element of the Investment Plan for Europe (or the ‘Junker Plan’), as well as allocating resources from the Baltic Innovation Fund, the “fund of funds” initiative developed in cooperation with the governments of Lithuania, Latvia and Estonia. This aims to increase capital investment in high growth potential small and medium-sized enterprises in the Baltic States.
The Fund seeks to assemble a diversified portfolio of companies, targeting majority or significant minority stake deals and writing tickets of €10m to €30m, that showcase high growth potential and the ability to compete on a truly global basis.
The Fund is focused on the Baltic States and the neighbouring regions of Poland, Scandinavia and Central Europe specifically. The Fund so far has invested in five companies within the healthcare, civil engineering, environment management (plastic recycling and waste management) and cosmetics and hygiene products manufacturing sectors.
The Fund is managed by one of Lithuania’s leading asset management companies INVL Asset Management, which is part of the Invalda INVL group. The group’s companies manage pension and mutual funds, alternative investments, individual portfolios, private equity assets, and other financial instruments. Over 250,000 clients in Lithuania and Latvia and international investors at the end of the third quarter of 2021 have entrusted the group with more than €1.5bn of assets under management. Active since 1991 and with a solid track record, Invalda INVL boasts 30 years’ worth of experience in managing private equity assets in the Baltic countries and CEE landscape while developing companies into best-in-class market leaders.
AS Repharm represents a group of companies offering healthcare, wholesale and retail of pharmaceutical and healthcare products, laboratory services, operating in the Baltic region and generating annual total revenues of over EUR 300 million. Customers and health are the focus for Repharm’s award-winning brands and operators including Mēness aptieka pharmacies, Veselības centru apvienība and MediCA group clinics, Centrālā laboratorija labs, the wholesaler Recipe Plus and Rīgas Farmaceitiskā fabrika, a producer of plant-based medicines and herbal therapeutic agents.