INVL Baltic Sea Growth Fund (the Fund), a private equity investment fund in the Baltic region, has announced that it has signed an agreement to acquire one of the most modern medical treatment centres in the Baltic region, located in Birštonas, Nemunas as well as the largest rehabilitation and post-acute care treatment centres in the Baltics, Eglės Sanatorija.
What is the growth rate of Eglės Sanatorija?
Prior to the start of the Covid-19 pandemic, foreign visitors accounted for a significant percentage of its client base and revenue streams. The majority of these revenues are achieved as a direct result of commercial and client activities [for the sanatorium division] with additional, although minor levels through state health insurance fund contributions.
During 2021, Egles Sanatorija and the treatment centre Nemunas achieved sales of EUR23.4 million with the group companies employing over 700 members of staff in total. The acquisition’s completion is subject to regulatory approval from the Lithuanian Competition Council and will be financed with a combination of equity by the Fund and debt.
Nerijus Drobavičius, Partner at the Fund, commented: “We are delighted to sign this agreement and see very high growth potential in the health and well-being sector.”
“The team at Eglės sanatorija have created a leading brand name in Lithuania which is now the largest service provider for the Baltic region. We believe this partnership will create increased value for Egles Sanatorija’s current and future client base while also reinforcing its leadership position for rehabilitation care and post-acute treatment across the Baltic states.”
What does the partnership mean to Eglės Sanatorija?
Vika Butkutė, Chairman of the Board at Egles Sanatorija, commented: “It is extremely important to us, after many decades of growing and developing our business, that it will now go into an exciting new chapter both in the Lithuanian healthcare sector and internationally.”
“We are confident that this new direction will help to modernise, innovate and improve the customer experience and ensure Egles Sanatorija continues to be successful in the future.”
Artūras Salda, Chief Executive Officer at Egles Sanatorija, said: “We have always prioritised investment into infrastructure and the quality of service offering. This is the main reason why we are among the best rehabilitation and post-acute treatment centres in Europe today.”
“This agreement will undoubtedly help us to grow our business in Lithuania and internationalise. The partnership will also help us to broaden our product and service offering to the benefit of our clients for whom health and wellness are extremely important,” he said.
“In terms of strategic next steps, we will now look to invest into the renovation of our buildings and real estate. Not only will this increase the energy efficiency of the buildings but it will also help us to offer a number of new, innovative procedures. These planned investments will therefore help us to ensure the delivery of higher quality services to our clients.”
Why is Eglės Sanatorija the right acquisition for the fund?
Nerijus Drobavičius, Partner at the Fund, said: “Behavioural patterns and the demographic situation in Lithuania and across the EU show that the population is increasingly mature and as a result is paying more attention to wellness, rehabilitation and daily health protection.”
“Demand for these services will only increase in the region. Working together with the professional teams of Nemunas and Egles Sanatorija, we will now focus on the adaption of our offerings to meet the changing needs of our clients. We are confident that this approach will help us to further growth the business and create real value in Lithuania and beyond.”
Deimantė Korsakaitė, Executive Partner at the Fund, said: “The pandemic represents the single most important health event for many decades and has subsequently reminded us all about the high importance of general well-being and disease prevention in society.”
“Signing this deal for an investment into rehabilitation and post-acute care treatment centres symbolises the Fund’s commitment to the delivery of financial performance in a sustainable manner, enabling a positive impact to society as a whole. At completion, this acquisition will be the Fund’s sixth portfolio firm moving the investment cycle to its second phase.”