NBGI Private Equity (NBGI) has acquired a majority stake in the Sante Group, a leading operator of oncology therapy centres and related technical services in Turkey for an undisclosed amount.
This is NBGI Private Equity’s sixth investment in South Eastern Europe (SEE) by its current SEE team. Other NBGI investments in the region include companies in a variety of sectors such as pharmaceuticals, marble quarrying, private education, and food and beverages. NBGI focuses on investments in quality management teams with significant growth prospects including management buyouts, growth capital investments and recapitalisations.
Founded in 1987, Sante operates four therapy centres, currently representing a quarter of the overall private oncology centre market in Turkey. The group is in the process of establishing new centres in Antakya (Southern Turkey) and Aleppo (Syria) and capital provided by NBGI will fund the Group’s continued growth plans.
In radiotherapy, the Group’s main focus area, growth rates in excess of 10-15% per annum are expected in Turkey over the coming years, driven by demographic trends (a growing and ageing population), economic growth and increasing social security and private health insurance spending. Current per capita radiotherapy spending in Turkey is USD2.3 versus USD22.8 in the US, indicating significant growth potential.
In addition to its oncology centres, a proportion of Sante’s revenues are generated through the provision of related technical services including the supply of radiotherapy equipment, training for users and the disposal of radioactive sources. This complementary service diversifies the Group’s revenue stream and reduces overall operating costs through increased efficiencies, differentiating Sante from its competitors.
The Group is managed by Dr Baki Temel and Tayfun Izmitli, both of whom have been active in the field for many years and have executed more than 100 radiotherapy projects globally. One of the leading experts in Turkey in the field of oncology services, Dr Temel founded Sante in 1987 and holds a PhD in Automatic Control and Biomedical Systems from the University of Sheffield. Mr. Izmitli has worked in the sector since 1992 and joined Dr. Temel at Sante in 1996.
The deal marks NBGI Private Equity’s first investment in Turkey, although it has built up substantial knowledge of the local market over the last decade through participations in private equity managers.
Yannis Voyatzis, senior member of the NBGI Private Equity team in SEE, says: “In a rapidly growing market, Sante offers an established presence and proven track record. Its management team is highly experienced and has the capability to grow the business into other markets.
“We are looking forward to working with the team to accelerate its expansion through our familiarity with the overall SEE region and the potential to create an investment platform for further acquisitions in the oncology services sector.”
Mete Ikiz (pictured), NBGI Private Equity’s senior team member in Istanbul, also adds: “Turkey is still a fairly nascent market for private equity and the case for investing here is compelling, particularly in the healthcare market which has seen significant growth in recent years on the back of high economic growth in the country and significant healthcare reform. We are actively pursuing several other attractive opportunities including through co-investment.”
Baki Temel, Chairman and CEO of the Sante Group, says: “After many years of providing technical radiotherapy services we established our first oncology centre in 2005, which has subsequently become the dominant part of the business and the area in which we anticipate considerable growth.
"There are significant opportunities in the Turkish market and elsewhere for increased provision of privately-run oncology services facilities. NBGI Private Equity has a deep knowledge of the region and we are looking forward to taking Sante to the next stage of its development in partnership with them."
