Apax Partners’ investment strategy in healthcare
Over the last 20 years, Apax partners has invested in many small and mid-sized companies in the healthcare sector. Bertrand Pivin intends to continue building on this strong momentum in the years to come.
A market in great health
Bertrand sees three main reasons as to why Apax Partners should continue its investments in the healthcare sector. The first reason is its structural growth drivers. “With an ageing population, a more health-conscious public, and the development of “modern” illnesses, such as stress and diabetes, public health care has never been such a hot topic.” But most importantly, healthcare is a gigantic market. “In France, the healthcare sector represents 11.5% of GDP, or €250 billion.” The market faces constant cost pressure and market participants must constantly offer improvements. Third, Bertrand sees innovation as an opportunity to offer new solutions that improve the way in which we currently deliver treatment.
Apax Partners – 20 years monitoring the medical sector
Historically, Apax Partners has been present in healthcare’s three main subsectors – medical devices, life sciences and services. “Medical devicescomprise all the equipment used for diagnostics, prevention and treatment of an illness, for example prostheses.” Bertrand cited Amplitude Surgical, France’s leading hip and knee prostheses maker. “Since the time we first invested in Amplitude, its revenues have doubled from €40 million to €80 million. We hope to further double its revenues by 2021 by focusing on international sales.”
The life sciences segment refers to biotechnology, pharmaceutical and biomedical companies, such as Unilabs, which Apax sold at the beginning of December, an opportune time for Bertrand to say a word on it. “Since our investment in 2007, Unilabs has doubled its revenues from €314 million to €695 million. We supported Unilabs’ management in their acquisition of 64 laboratories, the digitisation of collection and processing centres and its international development with the opening of new markets such as Peru and Portugal.”
The third subsector, services, includes private hospitals and specialised clinics. Here, Bertrand mentioned Elsan (formerly known as Vedici). “We helped them carry out various buildups, thus increasing their value from €30 million to €240 million within a few years. Elsan continued its spectacular growth to become the second largest private hospital group in France.” More recently, Apax Partners supported Capio, a European chain of private clinics, which was floated on the stock market in June 2015.
And for the future, Apax Partners has its sights set on medical devices
Bertrand has now turned his attention to medical devices. “With the market estimated at €20 billion in France, i.e. 10% of the world market, it is now a priority area”, he said.
He quoted another statistic that spoke volumes about this market’s growth perspectives: in 2004 there were 150 medical devices companies in France; in 2016 this number had risen to around 1,300 or almost 10 times as many. He is particularly interested in three types of medical devices: next-generation medical equipment, implants (orthopaedic, dental, etc.) and e-health devices that are being developed thanks to big data and smart devices.
“Across these three medical devices segments, we are looking at companies with sales of around €30 million to €300 million and who offer better care at more affordable prices. Our role is to identify and help these companies make the right choices to accelerate their development and contribute to the exponential development of these new markets.”