Theoretically, the private clinic market, which is growing even in this time of crisis, should be very attractive for investors, although practically, transactions are few. The reasons are the discrepancy between the expectations of negotiating parties and the unpredictability of the market.
According to Florin Andronescu, a Sanador private clinic investor, many times, an entrepreneur who developed a business for three-four years (and also invested in equipment) expects to obtain the money to fulfill all his dreams and lead a comfortable life. “He assesses the company by way of a combination of assets and profitability,” Andronescu said.
“In a time when the effects of the crisis are very visible, buyers want to pay a price as low as possible, justified by the crisis. The multiples are not the same anymore, if previously there was talk about 10 x EBITDA [earnings before interest, taxes, depreciation, and amortization], now, these have fallen to 6 x EBITDA. The potential of the market is more in theory, the market is unpredictable, investors do not know if things will go well for five years, for them to recover their money,” Andronescu said.
Catalin Popa, Chief Executive Officer of Euroclinic, the first private hospital in the country, explained why the sale of the company, which was negotiated last year, failed. “The problem was related to the reluctance of foreign investors to enter Romania and invest significantly in health. The field has some problems, especially the fact that the private insurance package has not been very well developed yet, and that, even though we have three-four private hospitals in the country, this segment has not yet had its running start,” Popa said.
