Mater Private owners move to refinance as sale put on ice

The owners of the Mater Private clinic have moved to refinance loans attached to the hospital group after putting a planned sale of the business on ice for the second time in 14 months.

CapVest, which owns 51 per cent of the company, came close to selling its stake to publicly quoted German healthcare giant Fresenius in April at a price tag of about €500 million.

While it is understood that the management team of Fresenius, which is based in Bad Homburg, near Frankfurt, was keen to execute a plan, it was overruled by the company’s board on strategy grounds. Such an acquisition would have marked the first foray by the German group’s hospital operator unit, Fresenius Helios, outside its domestic market.

CapVest had also held talks with private equity and infrastructure funds, but it is thought that the London-based venture capital firm, led by Irishman Seamus Fitzpatrick, concluded it could extract more value at this time by holding on to the business and refinancing loans attached to it.

AIB was the main financial backer of CapVest's purchase of a controlling stake in the Mater Private in 2007, which valued the business at €350 million. The remainder is in the hands of management and staff.

The move to refinance the loans comes against the backdrop of an improving outlook for private hospitals in Ireland as the country emerges from the financial crisis. This was underscored when State-owned health insurer VHI said earlier this week that its total gross premiums rose 10 per cent last year to €1.378 billion. Its membership rising for the first time in eight years to just over 1 million health insurance customers.

Financing rates

CapVest may be able to take some money off the table by overhauling the funding structure of the Mater Hospital, according to industry followers, as euro-zone corporate financing rates have come down in recent times, helped, most recently, by the European Central Bank's stimulus programme.

While it is understood that CapVest had been working on refinancing the loans for some time, it is not clear whether agreement has been reached. A spokesman for CapVest declined to comment.

The postponed sale comes about 14 months after CapVest's talks to sell the business to Netcare, a South African healthcare company, fell through after the sides failed to agree on price. It was reported at the time that those talks stemmed from an unsolicited approach from the Johannesburg-based company.

The Mater Private is estimated to have annual sales of about €200 million and operating profit of more than €40 million.

The company, led by executive chairman Fergus Clancy, also owns the Cork Medical Centre, and operates treatment centres in Limerick, Liverpool, Drogheda, Navan and Sligo.

Companies linked to the bidding process this year included AMP Capital, an Australian investment firm, Irish-American private equity fund Carlyle Cardinal Ireland, and Sydney-based investment bank and fund manager Macquarie.