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Opica has set a first round bid deadline of 12 July for the operating company (OpCo) of Capio UK, according to people familiar with the situation.
One buyout source familiar with the process said that buyers had already participated in pre auction management meetings, a reverse of what usually happens in a typical auction situation. They said that the early meetings were designed to gauge the seriousness of each buyer before the auction kicked off.
Those familiar with the situation said that it is difficult to anticipate how many buyers will submit bids by the bidding submission date given that much of the value has already been carved out in the earlier property disposal.
That deal saw Nick Leslau’s Prestbury vehicle acquire the property assets of Capio’s UK business for GBP 687m, a move that served to underwrite more than 40% of the entire Opica buyout of the Swedish hospitals business.
The payback to Prestbury in paying a premium for the property portfolio is a rental ratchet that kicks in after 10 years, the buyout source said. They described the ratchet as being hostile to the operating company with the rental rate suddenly rising to 58% of EBITDA after 10 years.
Two other sources familiar with the situation confirmed the ratchet, while a third said it was not as simple as depicted but would not provide any further details.
One source said that a number of buyers were independently valuing the OpCo business at about GBP 150-170m, adding that the NPV of the lease was about GBP 200m all-in. A second source said the OpCo could trade as much as GBP 300m but conceded that the splitting up of the property and operating assets and the introduction of a rental ratchet did not make the OpCo attractive.
The disposal includes both Capio UK’s ICT and diagnostic business but excludes the Florence Nightingale Hospitals, the buyout source said.
Opica, a buyout vehicle backed by funds managed by Apax Partners and Nordic Capital, acquired Capio, the listed Swedish hospitals business, last year for approximately GBP 1.67bn (EUR 2.47bn).
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