Updates
Sep21

Update 21 September 2021

Update 21 September 2021

It is now noticeable that the days are getting shorter, but we are currently enjoying nice autumn  weather here in the Netherlands. I hope that you are also enjoying a nice transition from summer to fall.

News from the Dutch healthcare sector includes:

  • Orpea in process of developing large-scale location near Amersfoort. Is this a change in strategy for the Dutch market?
  • Private equity invests for the first time in Dutch homecare sector. Will others follow?
  • In our snapshot we give an overview of Oranjeborg, a provider of long term care to complex clients

Orpea develop first large scale location in the Netherlands

Orpea has been active in the Dutch market since 2017 with the acquisition of WoonZorgNet (a provider of long-term mental healthcare). Since then Orpea has mainly grown through a series of acquisitions of Dutch chains providing nursing home care (September, Compartijn, Dagelijks Leven, etc.) All these chains have a focus on small-scale (15-30 apartments) locations. This means that Orpea’s Dutch strategy is quite different from its strategy in other countries where it has large locations often providing a mix of nursing homecare and senior living.

The Dutch strategy now appears to be changing. In Soesterberg, a small town near Amersfoort in the central part of the country, a large military complex is being redeveloped into a combined healthcare / housing location. There will be a nursing home with 106 apartments to be run by Orpea, and 104 rental apartments with a focus on senior living but open for everybody. The location will also have a restaurant.

Does this development of a large-scale location signal a new strategy for Orpea in the Dutch market? Rumors say that the management of the chains owned by Orpea are not happy as they believe that small-scale locations are an integral part of their market positioning.

 

Private equity enters the Dutch homecare segment

Private equity own a wide range of Dutch healthcare providers in different sectors (dental care, elderly care, mental healthcare, specialty clinics, etc.), but there have not yet been any investments in companies operating in the homecare segment. This is strange as this is an attractive segment due to the growth of the elderly population, government policy to keep the elderly at home for as long as possible and large opportunities for consolidation in a very fragmented market.

Recently the first private equity investment in the sector has taken place (all be it via a detour). Home Instead is an American homecare franchising company with operations in many countries (recently acquired by Honor Technology). Home Instead works with national franchise holders who have the right to develop their national market by finding local franchisees. Home Instead has been successful in the Netherlands and currently has almost 40 locations across the country. The company owning the Dutch master franchise was recently bought by a company that also owned the Swiss and Irish master franchises. This company has now been sold to Unigestion (a Swiss private equity company).

Will other private equity companies now also take a look at Dutch commercial homecare companies with an (almost) national or regional coverage?

Snapshot of a private Dutch healthcare operator : Oranjeborg

Oranjeborg is a private company providing long-term care to clients with a complex diagnosis, typically a combination of intellectual disability, psychiatric issues and/or addiction issues. The clients also often have a criminal background, and while clients stay voluntarily, approximately 10% of revenues come from the Justice Department. Oranjeborg was started in 2008 by Henk Stokvis (still CEO) and Frank Fagel. Both had many years of experience working in the disabled care sector and wanted to develop a new type of organization  helping clients with complex issues.

Oranjeborg has grown to five locations and had 2020 revenues of €9.5 million of which more than 70% is from the central government for long-term care. The company had an EBITDA of approximately €0.6 million and employed a total of 110 FTEs.