Générale de Santé

Activity
Hospital operator
Acquired
Jul 1997
Realised
Jul 2003
Sector
Healthcare

Business
Générale de Santé was acquired in July 1997 from Compagnie Générale des Eaux (now Vivendi) for €528 million. Cinven also acquired General Healthcare at the same time.

Générale de Santé is the leading private acute care hospital provider in France. The company is also active in psychiatric care, oncology care, nursing homes and medical laboratory testing units. Outside France, it has limited interests in Italy, Portugal and Canada.

Strategy
Vivendi had grown the business rapidly by acquisition, but the substantial asset base had failed to deliver acceptable returns on capital. Redirecting the strategy involved Cinven in strengthening the management team, halting acquisitions in the early years following the buyout, and concentrating on improving the operating performance of the existing assets. Générale de Santé returned to an acquisition strategy just ahead of IPO.

This general strategy included a number of initiatives including the development of a group identity within local management teams of over 100 disparate sites across France, creation of central group purchasing to leverage Générale de Santé’s scale, the introduction of speedier and more comprehensive financial reporting systems and closure or sale of persistently loss-making and under-performing sites.

A capital expenditure programme to regroup and consolidate Générale de Santé’s hospitals in 3 geographic locations was launched.

Outcome
Générale de Santé was floated on the Paris Bourse in June 2001. In July 2003 Cinven sold its remaining stake realising a 3 times investment multiple.