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Medica to Launch €250 Million IPO, Amid Expansion and Debt Reduction Plans

Strategic Insights

— 1 min read

French care homes group Medica, owned by private equity firms AXA Private Equity and BC Partners, is set to start a series of initial public offerings this year. The company, which provides long-term care to the elderly, aims to raise at least €250 million through its IPO. The funds will be used to cut debt and fund expansion plans, with the company planning to achieve a free float of 25%. Medica's IPO, led by bookrunners BNP Paribas, Credit Suisse, and Royal Bank of Scotland, is expected to list in Paris alongside competitors Orpea Sa and Korian SA.

Key Takeaways:

  • Medica, a French care homes group, is to start a series of initial public offerings this year, aiming to raise at least €250 million ($358 million) through its IPO.
  • The IPO proceeds will be used to reduce debt and fund the company's expansion plans.
  • Medica plans to achieve a free float of 25% and is expected to list in Paris alongside competitors Orpea Sa and Korian SA.
  • The bookrunners for the IPO are BNP Paribas, Credit Suisse, and Royal Bank of Scotland, with listing expected around February 8.
  • Medica's acquisition by BC Partners in 2006 was led by private equity firm Bridgepoint for about €750 million.
  • The IPO will pay off €185 million in mezzanine and term loans, reducing the company's leverage ratio to 4 to 4.5 times debt to earnings before interest, tax, depreciation, and amortisation (EBITDA) from 7.3 times.
  • BC Partners and AXA Private Equity may also reduce their holdings by selling existing shares, depending on how the IPO is received.
  • Medica has received waivers from lenders to deleverage the company and start paying dividends.

Statistics:

  • €250 million minimum IPO proceeds
  • €185 million in mezzanine and term loans to be paid off
  • Leverage ratio to be reduced to 4 to 4.5 times debt to EBITDA
  • 25% free float target
  • €750 million acquisition price by BC Partners in 2006
  • 7.3 times current leverage ratio
  • 4 to 4.5 times target leverage ratio

Sources:

  • People familiar with the deal said to Reuters
  • BNP Paribas (BNPP.PA)
  • Credit Suisse (CSGN.VX)
  • Royal Bank of Scotland (RBS.L)
  • Medica
  • AXA Private Equity (AXAF.PA)
  • BC Partners BCPRT.UL
  • Reuters LPC
  • Euclid Infotech Pvt. Ltd.

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