Ramsay Health Care Limited · ASX:RHC
Ramsay Health Care — Merger or Acquisition (September 2007)
27 slides from Ramsay Health Care's merger presentation, Sep 7, 2007
Slide 1: Acquisition of Capio UK
For personal use only Acquisition of Capio UK 7 September 2007 Managing Director, Pat Grier
Slide 2: Agenda
AGENDA 2 For personal use only Executive Summary Why the UK Hospital Sector? Capio UK Business Overview Transaction Overview Financials Compelling Proposition
Slide 3: Executive Summary
For personal use only 3 Executive Summary
Slide 4: Executive Summary
EXECUTIVE SUMMARY 4 For personal use only Acquisition of Capio UK, 4th largest operator of private hospitals in the UK EU Commission directive necessitating divestiture of Capio’s UK hospital portfolio Purchase price of £193 million(1) ($474 million(2)) Acquired on attractive acquisition mul
Slide 5: Why the UK Hospital Sector?
5 For personal use only Why the UK Hospital Sector?
Slide 6: UK Healthcare Market Overview
UK HEALTHCARE MARKET OVERVIEW 6 For personal use only UK Healthcare market dominated by the National Health Service (“NHS”) - Accounts for estimated 85% of the total UK health expenditure - Total private sector services revenues of approx £5.4 billion in 2005, of which private hospitals represent
Slide 7: Private Medical Insurance
PRIVATE MEDICAL INSURANCE 7 For personal use only Capio UK is well positioned and has strong relationships with Private Medical Insurance (“PMI”) providers - Broad national coverage - Size and scale - Strong relationships with consultants Stable PMI market volumes - 11% of the UK population has
Slide 8: NHS Outsourcing
NHS OUTSOURCING 8 For personal use only NHS spending on private sector outsourcing grown significantly in recent years - Government policy to improve NHS services and drive down waiting lists Up to £1 billion pa of NHS outsourcing work expected to be available to the private sector by 2008 Out
Slide 9: NHS Outsourcing
NHS OUTSOURCING 9 For personal use only Patient Choice/Choose & Book initiative being introduced under the Government’s Extended Choice Network scheme - Aims to provide choice of treatment facility to individual NHS patients and to address patient wait list reduction targets - Patients given the r
Slide 10: Capio UK Business Overview
10 For personal use only Capio UK Business Overview
Slide 11: Company Overview
COMPANY OVERVIEW 11 For personal use only Nationwide Coverage Represents the core business Private 22 private hospitals across England Hospitals 854 beds 48 operating theatres 9 ISTCs servicing NHS outsourced volumes on a “Take or Pay” (guranteed revenue) basis GC4 ISTC Contract Awarded
Slide 12: UK Competitive Dynamics
UK COMPETITIVE DYNAMICS 12 For personal use only The UK Private Acute Care market is dominated by five key operators, which together control 72% of the private market – GHG, Nuffield, Spire and Capio UK each operate national networks with HCA focused entirely on the London market Capio has good
Slide 13: Business Strengths
BUSINESS STRENGTHS 13 For personal use only Strong market position – national network with good coverage of the UK market - 4th largest private provider of PMI and self-pay services One of the largest providers of NHS-contracted services - Well positioned for additional growth in NHS work High
Slide 14: Business Strengths
BUSINESS STRENGTHS 14 For personal use only Strong local competitive positioning - Close relationships with key PMI funders (all Capio UK hospitals in leading PMI provider networks) - Established network of leading consultants Potential for additional growth in the UK and into Europe - Opportuni
Slide 15: Transaction Overview
15 For personal use only Transaction Overview
Slide 16: Acquisition of Leading UK Growth Platform
ACQUISITION OF LEADING UK GROWTH PLATFORM 16 For personal use only Capio UK is the 4th largest operator of private hospitals in the UK - 22 private hospitals spread throughout England together with 9 ISTCs servicing contracted NHS patient volumes - To be rebranded following integration into the Ra
Slide 17: Key Benefits of the Acquisition
KEY BENEFITS OF THE ACQUISITION 17 For personal use only Delivers a UK growth platform, within Ramsay’s area of core competency - UK market well understood and viewed as attractive by Ramsay management team • Historical track record of growth • Mix of private medical insurance and government outso
Slide 18: Key Benefits of the Acquisition
KEY BENEFITS OF THE ACQUISITION 18 For personal use only Experienced and self sufficient Capio UK management team will remain with the business - Local market expertise - Limited demands on Ramsay management time - Ramsay can lend its significant operating expertise to help improve the Capio UK op
Slide 19: Financials
For personal use only 19 Financials
Slide 20: Transaction Overview
TRANSACTION OVERVIEW 20 For personal use only Ramsay has agreed to acquire Capio AB’s UK hospitals operations - Capio AB was acquired by funds advised by Apax Partners Worldwide, Nordic Capital Fund VI and by funds advised or managed by Apax France in October, 2006 - Ramsay acquired Capio UK for c
Slide 21: Milestone Transaction
MILESTONE TRANSACTION 21 For personal use only Major step in international expansion plans – Ramsay’s first major overseas expansion into an attractive and well understood market with strong organic earnings growth potential Strong platform for further expansion in the UK and Europe FY2007 Ramsa
Slide 22: Key Financials
KEY FINANCIALS 22 For personal use only Forecast for strong future growth with substantial improvement in margins anticipated Expected results for the year ended 31 December, 2007 - Revenue ~£260 million - EBITDA ~£24 million - EBITDA margin (after rent) ~9% - EBITDAR margin (before rent) >20%
Slide 23: Proforma Financial Impact
PROFORMA FINANCIAL IMPACT 23 For personal use only ($ million) % UK Year Ended 30 June 2007 Ramsay Capio UK Proforma Contribution Revenue 2,105.9 601.2 2,707.1 22.2% EBITDA 273.4 49.1 322.5 15.2% EBIT 212.5 19.6 232.1 8.4% Maintenance capex for Ramsay core operations ~$69 million in 2008 and $74 m
Slide 24: Proforma Leverage
PROFORMA LEVERAGE 24 For personal use only Proforma Leverage Ramsay’s existing core operations highly cash flow positive 30 June 30 June 2008 Debt and leverage levels expected to peak in 2009 at 2007 conclusion of brownfields program Net Debt $1.3 bn $1.6 bn – 15% EBIT ROIC approx. 3 years after
Slide 25: Compelling Proposition
25 For personal use only Compelling Proposition
Slide 26: Compelling Proposition
COMPELLING PROPOSITION 26 For personal use only Within Ramsay’s core competency of managing and operating hospitals Best opportunity of scale for Ramsay in the UK private hospital sector Platform for significant expansion opportunities in the UK and wider European market Attractive acquisiti
Slide 27: For personal use only
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