27 Jan ArchiMed’s Direct Healthcare Group sees annual revenue more than double through four Buy-and-Build purchases over nine months
The transactions – with more in the pipeline – put DHG on course to be the leading pan-European provider of products and solutions for the care of patients with limited mobility.
January 25, 2021 – Direct Healthcare Group, a majority-owned portfolio company (and partner) of private equity healthcare specialist ArchiMed, increased its annual revenues in 2020 to some €67 million from €30 million the previous year, following four Buy-and-Build acquisitions executed between February and November 2020. Organic growth also contributed to the revenue expansion. ArchiMed provided the financing for the deals while its industry connections and expertise were key components in sourcing, negotiating and executing the transactions. DHG is held by ArchiMed’s MED Platform I fund, the largest healthcare fund based in Europe, after raising €1 billion through a final close in August.
The four deals transformed DHG from a mostly UK-focused manufacturer of innovative pressure care products (which prevent serious, sometimes life-threatening medical issues such as pressure sores) into a pan-European developer and manufacturer of a wide range of products designed to address all the challenges faced by patients with mobility issues. Three of the acquired companies, GATE Rehab Development, Handicare Patient Handling Europe (both headquartered in Sweden) and Lynch Healthcare Group (headquartered in the UK) are specialist providers of transfer solutions that simplify mobility – including innovative sit-to-stand raising aids, hygiene chairs and transfer platforms – for patients in hospitals, acute care environments, group homes and private homes. The fourth company, Finland-headquartered Carital Group Oy, is a leading European manufacturer of pressure care products, including technologically advanced mattresses that prevent the tissue deformation that leads to pressure ulcers.
DHG has seen its overall share of Europe’s market for healthcare mobility solutions rise to some 15 percent of the sector’s annual spend. When acquiring control of DHG in December 2019, ArchiMed included a funding commitment for acquisitions equal to more than twice DHG’s upfront value. As part of the transaction, DHG staff took a 20 percent stake in DHG.
“ArchiMed’s intimate understanding of our industry, our aligned vision and their strong ability to execute M&A helped us realize an ambitious plan for product and geographical expansion within Europe,” says DHG CEO Graham Ewart. Covid-19 presented unprecedented challenges, but with ArchiMed’s financial and managerial support, we were able to move forward with our strategy and further our common goal of becoming a truly international group with pan-European operations.”
“The integration of these acquisitions is further accelerating DHG’s growth and more deals are in the works,” says ArchiMed partner Antoine Faguer. ArchiMed and DHG have created a list of over 100 potential transactions for DHG and are currently in exclusive negotiations on two of them. “Our aim is to make DHG the clear number one in Europe in patient mobility,” says Faguer.
The Chairman of DHG, Carlos Alonso, adds, “ArchiMed’s investment and subsequent management of the group has enabled DHG to create a solid base for future growth throughout Europe, be that through innovative products for advancing movement and health, organic growth or M&A opportunities. We’re excited about the future and rolling out our plans for the next phase in the expansion of our group.”
The ArchiMed fund that holds DHG, MED Platform I, partners with growth companies in the European and North American mid-cap healthcare sectors, buying majority stakes for €50 million to €500 million in association with existing owners and managers. MED Platform I provides these platform companies with the strategic, tactical and financial resources they need to broaden product lines and expand into new regions, accelerating organic growth through an aggressive program of acquisitions.
Since it began investing in mid-2019, MED Platform I has acquired three platform companies in addition to DHG: Italy-based BOMI Group, a specialist in complex healthcare logistics, and U.S.-based NAMSA, a contract research organization offering outsourced services for clinical trials and healthcare-related testing of medical devices. Multiple buy-and-build acquisitions by all of these firms have already been completed. MED Platform I expects to announce a fourth major platform investment shortly.
About ArchiMed – www.archimed-group.eu
ArchiMed is a leading private equity firm focused exclusively on the healthcare industry. ArchiMed serves as a strategic and financial partner to European and North American small and middle-market businesses in targeted segments of healthcare, including pharmaceuticals, medical devices & technology, healthcare IT and consumer health. ArchiMed’s strategy is based upon healthcare specialization, integrated private equity, medical and operating expertise, and its unique trans-Atlantic platform that supports growth through internationalization.
Over the last 20 years, ArchiMed’s leadership team has directly managed and invested in over 40 small to large-size healthcare companies globally, representing over €5 billion of invested capital. ArchiMed currently manages nearly €2 billion in assets across four funds, small-cap focused MED I and MED II, gene & cell therapy focused PolyMED and mid-cap-focused MED Platform I. The latter is Europe’s largest healthcare fund at €1 billion. ArchiMed’s MED I 2014 vintage fund is the top performing buyout fund on a global level for its vintage, returning in excess of six times invested capital on a gross basis. ArchiMed is an impact investor and a signatory of the Principles for Responsible Investment, pledged to uphold the United Nations’ Sustainable Development Goals.
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