Cinven Portfolio Says Goodbye and Hello –

Generale de Sante, provider of private hospital health-care services in France, has floated on the premier marche of Euronext in Paris. The float values the business at EURO792 million, with the share price fixed at EURO20.25. Private equity provider, Cinven, which acquired the company in 1997, will retain a 19.2% holding in the business.

The private placement was mainly subscribed to by French and foreign institutional investors, representing a total of 17,729,064 shares and was 6.8 times oversubscribed. International institutional investors accounted for 83% of the demand.

“The IPO constitutes a new step in the development of Generale de Sante and will give us the financial means to play an active role in the reorganization of the private hospital sector in France and in Europe,” said Daniel Bour, chairman and chief executive officer of Generale de Sante.

Cinven acquired the U.K. and French hospital and health-care interests of Companie Generale des Eaux (now Vivendi) in July 1997 for GBP1.1 billion, marking it the largest European MBO at the time. The acquisition comprised two businesses – Generale de Sante and General Healthcare Group, a U.K.-based private hospital and health-care provider. At the time of the acquisition, these businesses were separated and managed independently. General Healthcare was merged with another Cinven portfolio company, U.K. hospital provider Amicus Healthcare, in December 1997 and the combined U.K. operations were subsequently sold to BC Partners for a consideration of GBP1.275 billion.

The combined enterprise value of the businesses upon the sale of both General Healthcare and the IPO of Generale de Sante reached euro3.2 billion. Generale de Sante revenue in 2000 reached euro885 million. Since it acquired the group, Cinven has significantly restructured the business through the acquisition of 13 facilities between 1998 and 2000 and three acquisitions made in the first quarter of 2001.

Over the same period, Generale de Sante invested more than EURO210 million to upgrade its existing facilities as part of its modernization program.

Cinven Director Simon Rowlands said, “The IPO of Generale de Sante was well received in the market and we have crystallized a portion of our investment after four years of helping the management build the business. With a retained holding in the company, we look forward to the continued success of the business.”


In other Cinven news, the firm has bought Photo Service and Photo Station, which make-up GrandVision‘s entire photo finishing division. The total package comprises equity, senior debt and mezzanine worth EURO282 million (Ffr1.85 billion). Cinven, the company’s management and minority investors, including Michael Likerman, co-founder of Photo Service, provided equity. Goldman Sachs arranged the debt package and GrandVision provided a loan note of EURO13 million (Ffr85 million).

Daniel Abittan and Likierman, co-chairmen of GrandVision, said, “The decision to separate from the historic base of the group was not easy. It will, however, permit the Photo Service and Photo Station teams to participate directly in the development of their companies.”

Cinven has established a holding company called Photo Europe as the acquisition vehicle with Jacques Baud, who runs the Photo Station outlets, as its CEO. Stefan Morin will be chief operating officer.

John Brown, deputy managing director of Cinven, said the deal was typical of the restructuring currently underway among French corporations. Following the disposal of its photo finishing division, GrandVision will refocus on its core business, optical retailing.

Abittan and Likierman said of the company’s future, “With all the burden of debt removed, we will be well placed to seize future opportunities while concentrating on strongly growing the profitability of our existing businesses.”

The company operates under the brand names of GrandOptical, Generale d’Optique and Solaris in France and Vision Express in the U.K.

Hugh Langmu, the Paris-based Cinven director who led the deal, said, “GrandVision was too unfocused and was penalized for this on the stock market.”

The photo businesses, which include 472 stores in France (where nearly 3,000 people are employed), Switzerland, Belgium and Luxembourg, reported revenue for last year of Ffr1.577 billion.

The company estimates that the two chains account for 13.5% of the market in photographic services, a market worth EURO2 billion.