German healthcare giant in €500m pursuit of Mater group

Fresenius

, the German publicly-quoted healthcare giant with a €34 billion market value, has emerged one of the final suitors vying to take over the Mater Private hospital group in a deal expected to be worth at as much as €500 million.

A transaction would mark the first foray by the German group’s hospital operator business outside of its domestic market, where it owns and runs 111 medical centres, including seven full-care hospitals.

The unit, Fresenius Helios, is the biggest provider of inpatient and outpatient care in Europe’s biggest economy, posting €483 million of net profit last year on sales of €5.6 billion. It has almost 70,000 staff.

Fresenius, based in Bad Homburg, north of Frankfurt, is the only industry bidder left in the race, competing with two financial firms for the Mater Private, according to sources close to the process.

Majority shareholder

AMP

Capital, an Australian investment firm, has also pursued the Mater Private, which was put up for sale in September by its majority shareholder CapVest, a London-based venture capital company led by Irishman

Seamus Fitzpatrick

. The process has also attracted a new bidder in the past three weeks, a private equity fund.

Representatives for Fresenius, CapVest and the Mater Private declined to comment. AMP Capital did not respond to requests seeking comment.

The process, being run by corporate financiers in Rothschild and Investec, is expected to come to a conclusion next month. It is not yet clear if a successful bidder for CapVest's stake of just over 50 per cent will also seek to acquire some of the remaining interest in the business, held by management and staff.

Shortlist of bidders

Irish-American private equity fund,

Carlyle Capital

Ireland, which made a shortlist of bidders for the Mater Private last month, is no longer actively involved in the process, according to sources. Australian investment bank and fund manager Macquarie had also previously been linked by newspaper reports to the sale.

CapVest took control of the Mater Private in 2007 in a deal that valued the business at €350 million. In 2012, the company bought Cork Medical Centre, a 75-bed facility developed by Sheehan Medical. The Mater Private group, which also operates treatment centres in Limerick, Liverpool, Drogheda, Navan and Sligo, has annual sales of about €200 million.

The Sunday Times reported two years ago that the hospital group's owners had proposed a merger with rival, the Hermitage Medical Clinic, in west Dublin. However, the plan failed to gain support.