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CMS Advises Mid Europa on Largest Healthcare Transaction in CEE Since 2008

CMS Advises Mid Europa on Largest Healthcare Transaction in CEE Since 2008

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CMS, working alongside Sidley Austin, has advised Mid Europa Partners on its sale of Alpha Medical, a prominent provider of laboratory testing services in the Czech Republic and Slovakia, to Unilabs. The sale price was not disclosed. Baker & McKenzie reportedly advised Unilabs on the the transaction, which remains subject to customary clearance by local competition authorities and is expected to close in Q2 2017.

According to CMS, the transaction represents the largest healthcare transaction in Central Europe since 2008 and is also the largest private equity exit in the Czech and Slovak markets since Mid Europa's sale of its stake in T- Mobile CZ in 2014 (as reported by CEE Legal Matters on February 12, 2014).

According to a Unilabs press release, "Alpha Medical is the #1 provider of laboratory diagnostics in the Czech Republic and Slovakia, performing more than 55 million tests annually across a well-invested network employing over 1,500 people. The company provides a full range of routine and specialized tests, mainly in the areas of biochemistry, microbiology, pathology, and genetics, and operates a fully integrated procurement and workflow system. Alpha Medical's operations are organized around a highly efficient network of 93 labs, of which 7 are large central labs which utilize automated testing equipment."

Unilabs has over 112 laboratories and 43 imaging units and a catalogue of more than 2,500 diagnostic tests, allowing it do describe itself as "one of Europe’s leading providers of clinical laboratory testing and medical diagnostic imaging services." The company is headquartered in Geneva and employs more than 5,300 people worldwide, operating laboratory and medical diagnostic imaging facilities in 12 countries, and generating revenues of EUR 673 million in 2015. 

Matthew Strassberg, co-Managing Partner of Mid Europa, who founded and leads Mid Europa's healthcare sector practice, commented: "It has been a privilege to work with Alpha's highly talented and motivated management team. Mid Europa partnered with Alpha to support its pro-active market consolidation, investing over EUR 120 million in 27 add-on acquisitions and capital expenditures. Having developed the company into a world-class healthcare service provider, we are pleased that Unilabs has recognized Alpha's unique strategic position and the excellence it offers in patient care and will back the management team as it seeks to take the business to the next level."

Pawel Padusinski, Partner and co-head of Mid Europa's Warsaw office who has been involved with Alpha throughout the investment cycle, noted: "During our ownership, Alpha invested heavily to enhance its service offering, to improve the speed and accuracy of its results and to broaden the network of labs and collection points. As a result, Alpha more than doubled the number of laboratory analyses it performs annually - to over 55 million tests during 2016, and has increased employment by more than 550 professionals, to well over 1,550."

Viktoria Habanova, Associate Director of Mid Europa who covers the Czech and Slovak markets and led the execution of the transaction, said: "Mid Europa continues to seek to partner with industry-leading management teams and business founders in the Czech Republic and Slovakia. Our positive experience of working with firms such as Karneval, CRa, Walmark and Alpha illustrates our on-going commitment to the Czech and Slovak markets where we have invested over EUR 1 billion over the past 10 years."  

Jos Lamers, CEO of Unilabs said: “This is an important foray into Eastern European markets for Unilabs. After a strong focus on generating organic growth, this acquisition signals our return to making smart acquisitions, aligned with our services portfolio and high-end quality standards. We look forward to welcoming the new teams from Alpha Medical to the Unilabs family.”

Peter Lednicky, the CEO of Alpha commented: "Mid Europa has been a great partner and a visionary investor whose unique strategic guidance and strong financial commitment allowed us to transform our business into the undisputed leader in the Czech and Slovak laboratory analysis market. On behalf of the entire Alpha team, I want to thank Mid Europa for its support and contribution to our success. At the same time, we would like to extend an enthusiastic welcome to Unilabs. With their advanced technological know-how and the long-term strategic horizon, we anticipate Unilabs will make a major contribution to our Company and to the improvement in the quality of medical care in the markets we serve."

Rothschild & Co acted as exclusive financial adviser to Mid Europa, and PwC and E&Y provided transaction services advice.

The transaction was executed by Mid Europa Associate Director Viktoria Habanova, Associate Filip Kisdobranski, and Analyst Przemyslaw Krenczyk.

CMS's core team consisted of Partners Helen Rodwell and Patrik Przyhoda and Senior Associate Frances Gerrard.