Mar 21, 2017

CBPE completes the IPO of Medica

CBPE Capital LLP (“CBPE”), is pleased to announce the successful admission of Medica Group PLC (“Medica”), the UK market leader in teleradiology, to the Official List (premium listing segment) and to trading on the London Stock Exchange’s main market (“Admission”).

CBPE has sold the majority of its stake and retained a significant holding of approximately 11% in the listed entity. The IPO has valued Medica at an Enterprise Value of £160m. The market capitalisation on Admission will be £150m.

CBPE acquired Medica from Nuffield Health in May 2013. Medica is the UK market leader in teleradiology, serving around half of the NHS Trusts in the UK as well as several independent sector clients. The group provides remote reporting for a range of diagnostic imaging modalities such as X-rays, CT and MRI scans, with services operating 24 hours a day, 365 days a year.

Under CBPE’s ownership, Medica has grown significantly, from around 38 employees to 85 today, with Consultant Radiologists also growing from 103 to around 250. Daytime CT/MRI scan volumes grew at 42% CAGR 2013-16 and Out-of-hours (Nighthawk) volume grew at 45% CAGR 2013-16.

Significant investment has been made into the technology platform to support best-in-class services, making the platform more robust and scalable for future growth. Service delivery has also had significant investment, leading to the average turnaround time for an emergency out-of-hours scan now being under 20 minutes, which is believed to be considerably shorter than the industry norm. Medica’s services offer its clients more efficient access to out-of-hours reporting and this can have a significant positive impact on a patient’s recovery prognosis. Furthermore, the clinical governance function has been strengthened with the recruitment of Dr Stephen Davies and the establishment of a Clinical Advisory Group, comprising two former Presidents of the British Institute of Radiology as well as several other highly respected Radiologists. A high quality clinical focus and strong technology platform have been instrumental factors in Medica’s growth.

Medica’s IPO received considerable support from institutional investors, attracted to the high-growth coupled with strong cash generation. As a public company, Medica is well-placed to continue to grow through expanding its range of services further as well as exploring international opportunities for expansion, in addition to continuing to benefit from underlying market growth.

John Graham, CEO of Medica commented:

“CBPE have been an incredibly supportive investor, bringing expertise and advice to help us achieve the growth so far. As a management team, we are excited by the IPO in further building Medica’s profile with existing and potential new clients. We are looking forward to introducing new services to benefit our clients and ultimately leveraging our platform to help more hospitals cope with ever growing demands. Our business model is based on maintaining the highest clinical governance standards and a robust technical platform, which alongside the strong fundamentals in our sector, positions us well.”

Anand Jain, Partner, CBPE commented:

“Medica is a great story. We have enjoyed working with the Medica team over the last four years and we feel proud to have been part of the strong growth the business has achieved to date. Medica has made a significant impact on how radiology is delivered in the UK, helping drive down reporting turnaround times and allowing hospitals to access specialist reporting capabilities day and night. This in turn helps facilitate earlier diagnosis for patients, leading to better clinical outcomes. We look forward to supporting the Board and senior team on continuing Medica’s good work”.

CBPE’s investment was originated and led by Anand Jain with support from Naveen Passi and is an example of CBPE’s strong track record of investing in the healthcare sector. Other current CBPE investments in healthcare include OH Assist, ARGC and SpaMedica.

Investec acted as sole sponsor, bookrunner and broker on the transaction. Eversheds Sutherland acted as legal adviser to Medica and Grant Thornton acted as reporting accountants.