Update 24 May 2018

In this update a focus on the increasing international interest in the Dutch commercial elderly care sector and a company that appears to be in play.

As reported earlier, Orpea is building a position in the Dutch healthcare sector through the acquisition of a provider of long-term psychiatric care (WoonZorgNet) and the recent acquisition of Dagelijks Leven. Dagelijks Leven operates a chain of 29 nursing homes with a total of 580 apartments.

Another company operating in the elderly care sector is European Care Residencies (ECR). ECR was started several years ago by the current owners Maria Scholts and Paul Bijleveld (who are a married couple). ECR currently operates nine elderly care locations with a total of 458 apartments. In addition, ECR also has approximately 100 short-stay studios where rehabilitation services are offered. The company is divided into a holding company, a company providing healthcare services (RAZ), and individual real estate companies per location.

ECR has been profitable until 2015 (the last year with published results) but appears to be going through a bit of a rough patch. In the last few years there have been severe quality issues with RAZ receiving several warnings from the healthcare authorities. RAZ also appears to be structurally loss-making, with all profits coming from other services. ECR has also been selling off real estate (to Confinimo among others), with a large share of profits in 2015 coming from one-off extraordinary results (probably profits from sale of real estate).

ECR is currently in the process of selling more real estate and according to rumors on the street several international operators have looked at ECR but not necessarily liked what they have seen. ECR is one of the largest commercial providers of elderly care in the Dutch market and should represent an interesting market entry opportunity. Will ECR be the next operator to be sold to an international operator? Who will be the buyer and the next entrant to the Dutch market?