Cinven generates strong returns from MediMediaEuropean private equity firm Cinven today announces that it has signed an agreement to sell MediMedia USA Inc (“MediMedia USA”), a leading healthcare marketing services and health management company, to Vestar Capital Partners. MediMedia USA was the core of a broader package of healthcare and business publications activities acquired from Vivendi Universal Publishing in April 2002 by Cinven together with The Carlyle Group and Apax France (“the Consortium”).
Following the acquisition, Cinven and the management team implemented a strategy that focused on a number of key elements: a fundamental reorganization that brought greater divisional focus to the businesses, a successful cost reduction programme, and then investment in growth strategies that created value. This strategy has led to four highly successful disposals (including today’s), one of the most recent being the sale of MediMedia’s European and Asian professional healthcare media businesses to United Business Media plc in 2004. The total enterprise value generated from the four divestments has amounted to €1.1 billion versus an entry enterprise value of €523 million, generating total returns of 3.2 times the original equity investment of €250 million.
MediMedia USA comprises two core activities. Its Patient Education Group provides integrated and comprehensive health management programmes and services, and patient education content and applications purchased by healthcare stakeholders including employers, hospitals, health plans, physicians, patients and pharmaceutical companies. The Pharma Group provides a variety of solutions to pharmaceuticals companies across their marketing activities, targeting physicians and patients with content and applications.
The disposal is subject to HSR clearance and is expected to complete in October 2006. Goldman Sachs advised the Consortium on this transaction.
Commenting on the disposal, Simon Rowlands, partner of Cinven said:
“The original investment proposition in 2002 was compelling and one to which we could bring our considerable expertise in the media sector. The international scope and complexity of the situation also played to Cinven’s core strengths.”
Marcus Wood, partner of Cinven, added:
“In the past four years under our ownership, a disparate group of businesses has been reorganised into distinct, niche operations led by excellent management who have then implemented strategies for growth. Significant value has been generated through revenue and EBITDA growth culminating in successful sales to blue-chip companies.”