Bain Capital LP is considering listing NotreDame Intermédica Saúde SA, the Brazilian health care provider it bought more than two years ago, within a year, according to two people with direct knowledge of the matter.
According to the first person, who requested anonymity because the plan remains under analysis, an initial public offering of Intermédica could help Boston-based Bain Capital recoup part of the investment it made on the acquisition of the company and prepare for new deals.
By selling a piece of the company to investors in an IPO, Bain Capital wants to capitalize on the success NotreDame Intermédica has had in riding out Brazil’s harshest recession since the 1930s.
Revenue at the low-cost health insurer has topped expectations as an increasing number of clients struggling with declining wages moved from higher-priced peers.
However, one of the people said that “it might be too early at this point” for Bain to hire investment banks to oversee the Intermédica IPO.
The media office of Bain Capital declined to comment. A public relations official for NotreDame Intermédica said the company does not comment on market speculation.
The transaction aims to take advantage of increasing risk-taking among domestic pension and investment firms as the economy begins to show some signs of recovery, the people said. Investment bankers are hopeful that a more favorable backdrop for offerings will help them resuscitate a market has seen only one debut listing over the past 23 months.
The equity market’s revival comes after dozens of merger and acquisition deals ran aground in recent months as buyers and sellers split over valuations and worried that Brazil’s economic and political turmoil could trigger regulatory or tax changes.
One of the people said Intermédica’s earnings before interest, tax, depreciation and amortization is poised to rise 70 percent this year to 400 million reais ($128 million), up from 236 million reais last year. EBITDA, as the gauge is known, is a widely followed measure of operational profitability.
In March 2014, Bain Capital agreed to pay 2 billion reais to Notredame Intermédica founder Paulo Barbanti for the company, which serves 3.6 million clients in the states of São Paulo and Rio de Janeiro, Brazil’s wealthiest.
Since the acquisition, Bain Capital helped orchestrate NotreDame Intermédica’s purchase of Grupo Santamália Saúde, which owned two hospitals and 22 healthcare centers, and Hospital Family. Last month, it took over the 70,000-strong clientele base of bankrupt health insurer Unimed ABC.
Source: Reuters Brazil.