MedLife becomes first private Romanian company to launch post-crisis IPO

MedLife becomes first private Romanian company to launch post-crisis IPO
By Carmen Simion in Bucharest December 18, 2016

The final price in the initial public offering (IPO) of Romania’s largest healthcare provider MedLife on the Bucharest Stock Exchange has been set at RON26 (€5.7) per share, significantly lower than the maximum price of the offering, of RON35 per share, according to a bourse statement issued on December 16. The total price for the offering was RON230mn.

This is the first IPO of a Romanian private company in years and its success is expected to bring other entrepreneurs to the bourse. The BVB has recently become more attractive after it was included on the on the FTSE Russell Watchlist for a potential upgrade to emerging market status. FTSE Russell announced on September 29 that the Romanian capital market was on its list of countries with “substantial potential” to be upgraded in the short or medium term. A decision on whether to upgrade Romania is due to be made in September 2017.

Private equity fund Value4Capital (V4C) has sold its entire 36.25% stake in the Romanian medical services provider through the IPO, while the International Finance Corporation (IFC), a member of the World Bank Group, sold a 7.75% stake. Prior to the IPO, IFC held a 12.75% stake. The Marcu family, MedLife’s majority shareholder, kept its 51% stake.

MeldLife sold 8.8mn shares, representing 44% of its shares. The final price of the offering implies a market capitalisation of the company of RON522.4mn. The shares are expected to start trading under the “M” symbol on the Bucharest bourse on December 21.

“This is the first IPO of a Romanian private company after almost a decade. It is a fantastic step forward for the capital market in general and I could say especially for the Romanian entrepreneurs who, via the capital market, will be able to increase their capital, to attract capital, to take over their competitors,” BVB president Lucian Anghel told Agerpres news agecy.

At the end of September, MedLife operated 36 clinics, eight general and specialist hospitals, 24 laboratories with more than 143 sampling points, nine pharmacies and eight dental offices. In the financial year ended December 2015, the group's total sales amounted to RON391mn. Sales during the first nine months of 2016 amounted to RON 361.5mn and Ebitda to RON38.9mn.

MedLife has been expanding rapidly in the past year. At the end of September it opened a new clinic in the southern town of Ploiesti, while in August it acquired a 90% stake in Centrul Medical Panduri medical centre. Acquisitions in the past year also include Diamed Center, Prima Medical and Stem Cells Bank and Dent Estet, the largest local dental services provider.