Palamon exits from Prospitalia for a 3.0x return
PS S.à r.l. which is majority-owned by the funds managed by Palamon Capital Partners (“Palamon”), has successfully disposed of its investment in PS TopCo GmbH to an undisclosed investor. PS TopCo GmbH is a parent of Prospitalia GmbH (“Prospitalia” or the “Company”). Palamon is one of Europe’s leading mid-market private equity firms and, over the term of its investment in PS S.à r.l., has generated a return of 3.0x on capital invested.
Prospitalia is the leading Group Purchasing Organisation (“GPO”) in Germany, providing procurement services to more than 900 hospitals and healthcare facilities across the country to help lower the cost of goods purchased. The Company currently reports a pooled purchasing volume of €1.2 billion. Palamon originally invested in PS S.à r.l. when the majority of acute hospitals did not use GPO services, with the thesis that significant additional market penetration was inevitable as pressures on healthcare budgets would necessitate cost saving measures. Purchasing volumes for German GPOs are reported to have grown between 5% and 10% per year and today, surveys show that more than 60% of German acute hospital beds are served by GPOs.
Healthcare is an important investment theme for Palamon, which has committed more than €200 million to the sector over the past seven years. The Firm has invested across Europe in a range of market-leading businesses such as; SARquavitae, Spain’s largest elderly care provider with 12,000 staff; IDH, the largest dental corporate in the UK with more than
550 practices; POLIKUM, a leading provider of outpatient healthcare in Germany; and OberScharrer Group, the leading ophthalmology group in Germany.
Pascal Noth, Partner at Palamon, commented, “We are delighted with the success of our investment in Prospitalia, which has returned 3.0x on invested capital. Prospitalia is the number one GPO in Germany and has built out its position with a strong reputation for the quality of services it provides. We thank the management team for driving the business to where it is today and wish them well for the future.”
Louis Elson, Managing Partner at Palamon, said, “Our success in this investment once again demonstrates the effectiveness of our thesis-led investment approach to identify, invest into, and grow market-leading companies across Europe. Prospitalia was Palamon’s first investment in the healthcare industry; an investment area in which we have now established a strong track record.”
Palamon has completed eight realisations from its €670 million 2006 fund, Palamon European Equity II, which has to date produced proceeds of €708 million at a return of 2.8x multiple of invested capital on fully exited companies. Palamon invests in high growth businesses and has a strong track record with its portfolio companies achieving an average revenue growth of 19% per annum for the past 10 years.
