French groups bid for German nursing home firm Casa Reha, say sources: Reuters

(Reuters) French nursing home operators Korian and DomusVi are bidding for German peer Casa Reha as they seek to increase their presence in Europe’s biggest economy, people familiar with the matter said.

Buyout group Carlyle, which owns German peer Alloheim, also submitted a tentative bid for the group last week, the sources said.
Other strategic and private equity players also handed in bids, another source said.

Casa Reha has annual earnings before interest, tax, depreciation, and amortisation of about 30 million euros ($33 million) and is expected to fetch roughly 10 times that in a potential deal, in line with the valuation of listed peers, the sources said.

Lazard and Societe Generale are advising seller HgCapital on the deal, which is expected to be concluded before year-end.

The industry is likely to grow because of the ageing population, although nursing home operators face the challenge of maintaining care quality while keeping costs under control.

HgCapital bought a majority stake in Casa Reha in 2007, while former owner Advent retains a minority holding.

DomusVi is owned by French buyout group PAI Partners.

HgCapital and Advent, the banks and the potential bidders declined to comment or were not immediately available for comment.