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Palamon Capital Partners said March 13 that it agreed to sell OberScharrer Group to Nordic Capital. Financial terms weren’t disclosed. OberScharrer, an ophthalmology group in Germany, provides more than 85,000 treatments per year through its clinics. The sale will generate investment returns of 3.6x invested capital for Palamon.

PRESS RELEASE

Palamon agrees sale of OberScharrer Group to Nordic Capital

Palamon Capital Partners (“Palamon” or the “Firm”), a pan-European growth investor, has agreed the sale of OberScharrer Group (“OberScharrer” or the “the Group”) to Nordic Capital Fund IX (“Nordic Capital”).  The sale, which is subject to regulatory approvals, will generate investment returns of 3.6x invested capital for Palamon.  The full terms of the transaction were not disclosed.

OberScharrer is the largest ophthalmology group in Germany, delivering more than 85,000 treatments per year through its c. 80 clinics.  Key group services include cataract operations, innovative treatments such as Intravitreal Operative Drug Application (IVOM) for degenerative eye disorders, as well as non-invasive eye treatments and the diagnosis of eye disorders.

Palamon acquired a substantial majority stake in OberScharrer from its two Founders in 2011 having identified the opportunity to build the national leader in the highly fragmented €2.4 billion German ophthalmology market.  The investment was underpinned by stable market growth dynamics of approximately 4% per annum, driven principally by the ageing demographics, the development of new treatments, and a structural shift in the delivery of public healthcare to an outpatient service model.  Palamon worked with the Founders to build out a new management team and create a market-leading M&A capability that propelled the business to triple in size during the hold period.

Louis Elson, Managing Partner at Palamon Capital Partnerscommented: “This is a typical Palamon thesis-led investment, in which we identified and invested into a long-term growth trend.  In OberScharrer we found the ideal platform with which to consolidate the fragmented German ophthalmology market and create a pan-regional player, but which today still only has 5% market share.  The opportunity for continued growth is therefore substantial and with a superb management team in place, the Company is poised for the next stage of development under Nordic Capital’s control.”

Sibylle Stauch-Eckmann, CEO of OberScharrer said: “Palamon has been an exceptional partner to OberScharrer. The Firm’s strategic guidance and financial support has been critical in achieving our ambitious growth strategy, whilst maintaining a firm commitment to the clinical excellence that is at the heart of what we do.  The opportunity for future growth remains extensive and we are excited about the prospects as we continue to build our business under the ownership of Nordic Capital.”

Dr Scharrer, co-Founder of OberScharrer Group said: “We selected Palamon as a partner that shared our vision for regional growth and a dedication to the excellent patient service we provide.  I am delighted that during the period of ownership Palamon have surpassed expectations as a strategic partner, financial supporter and investment manager.”

The exit of OberScharrer marks the sixteenth realisation from the Firm’s 2006 vintage second fund, which has to date produced eight realisations at more than 3.0x return on invested capital.  Healthcare has been an important investment theme for Palamon, which has committed more than €440 million to the sector. The Firm has developed a range of market-leading businesses across Europe, including; {my}dentist, the largest dental operator by far in the UK; Prospitalia, the leading Group Purchasing Organisation in Germany which the Firm exited in 2015 for a 3.0x return and SARquavitae, Spain’s largest elderly care provider which it exited in February 2017 for a 3.0x return.