Axa Private Equity is investing EUR150m in the capital of KOS, a CIR group company and provider of care homes for senior citizens, rehabilitation services, healthcare centres and hospital services.
Under the agreement, the first phase will see Axa Private Equity subscribe to a EUR20m reserved capital increase by KOS to support its development.
It will also buy the majority of shares held by minority shareholders, in particular the entire shareholdings of Morgan Stanley and Wise Equity.
Over the next three years, Axa Private Equity will then participate in further reserved capital increases, in one or more tranches. Axa Private Equity’s stake of 41 per cent at closing will rise incrementally over the next three years to 47 per cent.
The deal, which requires the consent of the European antitrust authorities, is scheduled to close in the first quarter of 2011.
Since its foundation in 2002, KOS has undergone extremely rapid growth, chiefly by means of acquisitions. This has made the group Italy’s leading operator in terms of revenue and number of beds in the sector for care homes for senior citizens and number four in physical and psychological rehabilitation.
Rodolfo De Benedetti, chief executive of CIR, says: “Today’s agreement shows just how much value has been created over the years by KOS, a company that in just seven years of business has become a point of reference in the Italian healthcare sector. The KOS group, with its 4,000 employees, has shown in these years how capable it is of blending managerial skills with quality of service for its patients. The entry of a prestigious international partner such as Axa Private Equity alongside the majority shareholder CIR will provide KOS with new resources that will be entirely dedicated to the development of the company”.
Nicolò Saidelli, head of the LBO mid cap team at Axa Private Equity in Italy, says: “We are proud of this transaction and of our partnership with a group of the quality of CIR. We have been impressed by KOS’s growth over the last five years and by the ability of the company and its management to successfully integrate its acquisitions. We have based our decision to invest on the fragmentation of the market for rehabilitation and care homes in Italy, KOS’s leading position in the market and CIR’s quality as a strategic partner. Axa Private Equity’s core investment philosophy consists in helping companies grow, and we are therefore delighted to support KOS and its management in their plans for future growth, both organically and by acquisitions.”