The merger between health plan operators Hapvida and NotreDame Intermédica (GNDI) will generate a R$1.4 billion increase in the combined company’s EBTIDA until 2024. Of this amount, 40% of synergies will be captured this year, and most of the gains will come from the increase in revenue with the creation of a medical plan with national coverage. The estimate is that the sale of this new national plan can bring an increase of R$800 million in recurring EBITDA in three years.
Currently, the two vertical health operators have regional operations. Hapvida is strong in the North and Northeast regions, and Intermédica has a greater presence in the Southeast region. This presence in specific markets keeps them from selling their health insurance plans to large companies that have employees distributed throughout the country.
This market is served by Unimeds, Bradesco, SulAmérica, and Amil, which work with an accredited network. Hapvida and Intermédica operate with their own network. Of the 27 capitals of the country in which the companies are present, they have vertical units in 19 of them.
Intermédica estimates that, currently, around 40% of its offers are rejected due to the lack of a product with national coverage. This represents about 1 million users that could be captured over the next three years and lead to a 2.1% increase in market share for the combined company. In the current scenario, the operators together have around 18% of market share.
“We believe that in two months, this new product with national coverage will be on the market,” said Irlau Machado, president of NotreDame Intermédica. “Over the last few months, we have been working with our integration teams, refining data to offer this product soon,” added Jorge Pinheiro, president of Hapvida.
Both executives will share the chairmanship of the board of directors of the combined company and each will continue to carry out the day-to-day activities of their respective health operators for the next three years – a period in which the healthcare sector will still undergo a process of consolidation. “We don’t want to discourage the current moment of the two companies, which continue with their growth agendas, regardless of the merger,” highlighted Mr. Pinheiro.
The increase in revenue will also come from expanding the offer of individual plans in the country, which is scarce in São Paulo, and from cross-selling products such as dental insurance hospital services. The two operators together have 84 hospitals, some of which have idle capacity. In 2021, Intermédica’s revenue from hospital services was R$1.2 billion.
The cost line, with the renegotiation of supply contracts, should bring savings of R$241 million. In terms of expenses, savings of R$339 million are expected — totaling an impact of R$580 million on EBITDA.
According to the executives, synergies should exceed the amount of R$1.4 billion, announced yesterday. That’s because the companies still have not measured all the revenue opportunities, since the merger was approved in December. Tax gains from the merger were not accounted for, nor were future acquisitions. “There is a truckload of opportunities for more synergies,” said Mr. Pinheiro.
Another relevant gain not yet accounted for is the reduction in medical costs. The two executives are committed to predictive health solutions through diagnostic medicine. The goal is to integrate, through artificial intelligence, the data obtained in the exams carried out in the operators’ own laboratories. And, with that, to trace the trends of risk of emergence and worsening of diseases, adoption of the best medical treatments, in addition to monitoring chronic patients. Hapvida has around 200 laboratory units and GNDI has been investing to expand this division.
The announced synergies were slightly below market forecasts, but most of the projections considered the fiscal gain, which was not accounted for by the operators. The companies’ papers closed yesterday’s trading session with a drop of 4.67%.
Next Friday, the shares of the two operators will be integrated and on Monday the shares of Intermédica will no longer be traded on the stock exchange B3.
Source: Valor International