BC Partners banks on consumer health with Havea Group

Havea’s addition to the portfolio is a ‘natural extension’ on previous investments.

Mark Hersee, BC Partners

BC Partners plans to grow its latest healthcare acquisition Havea by expanding into different countries, partner Mark Hersee tells PE Hub.

The firm entered exclusive negotiations in June to acquire a majority stake in Havea from 3i Group. The price tag was reportedly between $1.05 billion to $1.16 billion.

Headquartered in Boufféré, France, Havea has brought five brands under its umbrella in the last five years, all within the natural healthcare sector. The companies – Aragan, Biolane, Densmore, Dermovitamina and Vitavea – cover food supplements, personal care and baby products.

Healthcare deals are not new for BC Partners, which has invested in a range of sectors from hospitals and nursing homes to animal health and pharma. Havea is a natural extension to the portfolio, according to Hersee, who says it was previously missing a consumer healthcare asset. “Havea is our platform into this subsector of healthcare,” he says.

On top of Havea’s organic growth, BC plans to up the pace on further M&A, having built a long list of potential targets during the due diligence process. These companies, well known within the industry, vary from small to quite large, even matching Havea’s own size, Hersee says. “They either have complementary products that can fit into the existing Havea brands, or they’re in a new geography that would sit very nicely with the business.”

Havea has an established presence in France, Italy and Belgium. BC plans to expand that reach. “We’d like to broaden that footprint,” Hersee says. “Increase the size of its presence in Italy and the Benelux, among others, and also look at some deals in France to strengthen what they have there.”

Hersee has also set his eyes on new countries, such as Spain and Germany. Spain is an “obvious one”, as it has a similar pharmacy-led market to France, he says.

Multiple diagnoses

Expanding in the European healthcare market has its challenges. There are many different regulatory set ups and Hersee cautions against thinking of it as a homogeneous unit. “In reality, there’s over 20 different markets and they all have their own nuances,” he adds.

Havea excludes none of the usual routes for exits. Due to the heavily fragmented market, there is a lot of scope for M&A, says Hersee. The likelihood of another sponsor coming along to “continue the journey” is a definite possibility. Another option could be a strategic buyer looking for “strategic brands”, as Havea calls them. An IPO is conceivable, but is the least likely of the three, adds Hersee.

The longstanding trends of an ageing population, rising expenditure on health and increasing rates of diagnosis have been driving healthcare deals, he says. Within consumer health, BC has identified customers’ growing health-consciousness as a key driver.

Many consumers are opting for natural rather than chemical-based alternatives, making Havea’s market grow even faster. “It’s a lot more brand driven,” says Hersee. “There’s a lot of innovation, just like in the pharma sector, which drives growth.” Additionally, heavy regulations around the pharma sector cause products to be more expensive, whereas consumer health allows more freedom with pricing structures.