GOTHENBURG, Sweden,
Sept. 25, 2018 /PRNewswire/ -- The
shareholders of Capio AB are hereby invited to attend the
Extraordinary General Meeting (the "Meeting") for the primary
purpose of resolving on an approval of the proposed sale of Capio
Santé SA. The Meeting will be held at Mannheimer Swartling
Advokatbyrå, Östra Hamngatan 16, 403 14 Gothenburg, at 4:00 p.m. CEST on Thursday 18 October 2018. Registration will commence from
3:30 p.m. CEST.
A. RIGHT TO PARTICIPATE IN THE EXTRAORDINARY GENERAL
MEETING
Shareholders who wish to participate in the Meeting must:
firstly, be registered in the share register maintained by
Euroclear Sweden AB no later than Friday 12
October 2018, and
secondly, notify the company of their intention to attend the
Meeting under the address Capio AB, c/o Euroclear Sweden,
"Extraordinary General Meeting", P.O. Box 191, SE-101 23 Stockholm,
by calling +46-8-402-91-36, weekdays between
9:00 a.m. and 4:00 p.m., or at the website www.capio.com no
later than Friday 12 October
2018.
In connection with the notification, shareholders must state
their name, address, telephone number (daytime), personal or
corporate identity number and information concerning their
shareholding. Shareholders or proxies for shareholders at the
Meeting may bring a maximum of two assistants with them to the
Meeting. Assistants may accompany the shareholder to the Meeting
only if the shareholder gives notice of their attendance in
conjunction with its own notification of participation in
accordance with the above. For shareholders who will be represented
by proxy at the Meeting, the original version of a signed and dated
power of attorney must be enclosed with the notification. A form
for the power of attorney is available on the company's website,
www.capio.com and will be sent by mail on request to shareholders
who state their address. For those representing a legal entity, a
verified copy of the registration certificate or corresponding
document showing the company's signatories must also be
submitted.
In order to be entitled to participate in the Meeting,
shareholders whose shareholding is registered in the name of a
nominee must re-register their shares in their own name at
Euroclear Sweden AB. Shareholders who require such re-registration
should notify their nominee well in advance of 12 Friday
October 2018, when such
re-registration must have been completed.
B. AGENDA OF THE MEETING
Proposal for agenda
- Opening of the Meeting.
- Election of Chairman of the Meeting.
- Preparation and approval of the list of shareholders entitled
to vote at the Meeting.
- Approval of the agenda.
- Election of one or two persons to approve the minutes of the
Meeting.
- Determination of whether the Meeting has been duly
convened.
- Resolution on approval of the proposed sale of Capio Santé
SA.
- Resolution on extra fees to the Chairman of the Response
Committee Michael Wolf and to the
Chairman of the Finance and Audit Committee Gunilla Rudebjer.
- Closing of the Meeting.
Proposal regarding the approval of the proposed sale of Capio
Santé SA (Item 7)
General
On 21 August 2018 Capio AB
("Capio") announced that Capio Group Services AB ("Capio Group
Services") and Vivalto Santé Holding ("Vivalto") had entered into
exclusivity regarding the proposed sale of Capio Santé SA and its
subsidiaries ("Capio France") to Vivalto (the "Transaction"). As
described in the announcement, finalisation of the Transaction was,
in addition to the approval by the Capio shareholders at an
extraordinary general meeting, subject to the following
conditions:
(a) Vivalto's right to terminate the Transaction on the basis of
the outcome of a confirmatory due diligence of Capio France by
Vivalto; and
(b) approval of relevant regulatory authorities.
Vivalto has since waived its right to terminate the Transaction
on the basis of the due diligence and, as a result, the condition
in (a) above is no longer applicable, and the only outstanding
condition, other than the approval by the Capio shareholders, is
the approval of relevant regulatory authorities, which is further
described in section Regulatory Approval below.
As mentioned in the announcement, an employee consultation
process must be completed before Capio deciding to enter into a
share purchase agreement (the "Agreement") in relation to the
Transaction. The consultation process is estimated to be finalised
on 10 October 2018.
In light of the above, the Board of Directors hereby unanimously
proposes that the Meeting approves the Transaction on the principal
terms and conditions described below.
Summary of background and reasons for the Transaction
As part of its normal course of business, Capio continuously
evaluates different alternatives to drive growth and create
shareholder value. As part of this evaluation, and in response to
approaches from potential buyers, Capio, during the course of
spring and summer 2018, engaged in discussions with multiple buyers
concerning a sale of the group's non-Nordic operations. The
competitiveness of this process enabled Capio to unlock a
compelling value for the French business.
Under the Transaction, the Board believes Capio would secure an
attractive price for the company's French operations, whilst
allowing Capio to accelerate its focus on its less capital
intensive Nordic operations, building on current leadership
positions and proven track record of growth in markets underpinned
by robust fundamentals.
As communicated on 21 August 2018,
Capio continues to assess alternatives for its German operations.
Following this announcement, Capio has been approached by multiple
parties expressing interest in its German operations. Management
has put in place a recovery plan which is expected to deliver a
significant improvement in performance going forward, starting to
materialise in the fourth quarter 2018 and continue into 2019. More
details regarding the timing of a sale process will be provided in
due course.
Capio focused on the Nordics
The following financial summary for Capio Nordic has been
extracted from Capio's audited financial statements for the years
2015, 2016 and 2017 and unaudited financial statements for the RTM
period ending 30 June 2018
Nordic
(MSEK)
|
2015A
|
2016A
|
2017A
|
RTM (H1 -
18
|
Net Sales
|
7 243
|
7 584
|
8 695
|
9 050
|
Organic sales growth (%)*
|
4,6%
|
3,8%
|
4,1%
|
3,8%
|
Total
sales growth (%)*
|
3,9%
|
4,7%
|
14,6%
|
11,8%
|
|
|
|
|
|
EBITDA*
|
458
|
522
|
632
|
663
|
%
Margin*
|
6,3%
|
6,9%
|
7,3%
|
7,3%
|
|
|
|
|
|
EBITA*
|
316
|
371
|
459
|
480
|
%
Margin*
|
4,4%
|
4,9%
|
5,3%
|
5,3%
|
|
|
|
|
|
Capital
Employed*
|
2 778
|
2 932
|
3 509
|
3 732
|
%
Return on Capital Employed*
|
11,4%
|
12,7%
|
13,1%
|
12,9%
|
|
|
|
|
|
Net capex*
|
135
|
168
|
180
|
184
|
In %
of net sales*
|
1,9%
|
2,2%
|
2,1%
|
2,0%
|
* Alternative Performance Measure (non-IFRS measure). For
additional information, please refer to Capio's Interim Report
January – June 2018 (note 9 on page
25pp and definitions on page 34),
/mbpublicbinaryproxy/Main/277/2578743/881153.pdf, and Capio's
annual report 2017 (note 36 on page 111 and definitions on page
126),
https://capio.com/siteassets/capio.com/investors/reports/capio-annualreport20171.pdf.
Capio's leadership positions in the Nordics have supported a
track record of strong performance since Capio's IPO in 2015. The
operating margins of Capio's operations in the Nordics have
steadily improved, with the EBITA margin having increased from 4.4%
to 5.3% between 2015 and 2017, supported by a focus on KPIs and
efficiency metrics. Management expects further improvements of
operating margins as a result of overhead savings from a more
concentrated geographical focus, procurement savings, increased
productivity gains from digitalisation, increasing specialisation
and coordination between the Nordic countries. The low capital
requirement of Capio's (largely outpatient) Nordics business
results in significantly lower capex requirements vs. in
France and Germany, implying a more attractive cash
conversion profile for Capio Nordics. Furthermore Return on Capital
Employed in Capio's Nordics business (13.1% in 2017) is
significantly higher than in France (5.1%) and Germany (5.5%).
After the proposed divestment of Capio France, Capio will be
focused on the attractive Nordic markets and its less capital
intensive operations there. In Sweden, Capio is the largest private
healthcare operator, offering healthcare across more than 100
primary care centres and a broad network of somatic and psychiatric
specialist care centres, including services within e.g.
orthopaedics, geriatric care, ophthalmology, ear-nose-throat,
gynaecology, and psychiatry, two local hospitals and the flagship
Capio St Göran's Hospital. In Norway and Denmark, Capio offers primary and specialist
care with a nationwide presence in both countries.
The Nordic market provides clear opportunities for continued
good organic growth. Capio's specialised businesses and nationwide
presence allow the company to rapidly expand tailor-made patient
offerings and coherent care chains across the Nordic countries.
Capio is at the forefront in driving digitalisation in healthcare
with its combined digital and physical platform, launched in
Sweden and with Norway to follow. Integration across all
primary care centres has the potential to free up significant
capacity, increasing availability for patients with little change
to the cost base, helping to attract new patients and reduce churn.
Over time, Capio aims to move 1 out of 5 visits to the digital
channel. The digital market in Sweden is currently growing at a rate of +100%
p.a. and Capio is well positioned to capture growth in this rapidly
growing segment. Capio's combination of digital and physical
healthcare constitutes a unique patient offering and will transform
healthcare provision in Sweden and
the Nordics both in terms of availability for patients and staff
productivity. Capio has more than 100 physical primary care centres
and the number of Swedes listed at a Capio centre is now close to
900,000. This means that Capio has a recurring base of listed
patients of about 9% of the Swedish population as its platform for
digital and physical services. In addition there are substantial
growth opportunities through further consolidation of the
fragmented Nordic market with a strengthened balance sheet.
Capio is preparing for a closer coordination of the businesses
in Sweden, Norway and Denmark to accelerate growth and streamline
offerings both from a medical and operational efficiency
perspective, including savings in overhead costs and procurement
over the coming two years. The step-wise implementation of this
Nordic cooperation, based on specialisation, will start in Q1
2019.
Supported by the factors set out above and building off a strong
financial track record, the Board of Capio is very confident
regarding the prospects of the business, both in the short term and
beyond.
About Capio France
Capio France has a strong national presence in seven healthcare
regions, including the rapidly growing areas around Paris, Lyon
and Toulouse. The segment's 22
hospitals and specialist clinics provide a wide range of
treatments, primarily within medicine, surgery and obstetrics. For
the rolling twelve month period ending 30
June 2018, Capio France's approximately 5,400 employees
(average FTE) provided healthcare services across 645,000
outpatient visits and 130,000 inpatient visits respectively,
generating net sales of MSEK 5,602 representing 35% of the total
group net sales. The EBITDA for the same period was MSEK 479,
representing 43% of the total group EBITDA and the EBITA was MSEK
227, representing 36% of total group EBITA. The capital employed of
Capio France was MSEK 4,758 as at 30 June
2018, representing 48% of total group capital employed.
The following financial summary for Capio France has been
extracted from Capio's audited financial statements for the years
2015, 2016 and 2017 and unaudited financial statements for the RTM
period ending 30 June 2018.
France
(MSEK)
|
2015A
|
2016A
|
2017A
|
RTM (H1 -
18)
|
Net Sales
|
5 098
|
5 313
|
5 435
|
5 602
|
Organic sales growth (%)*
|
0,7%
|
2,4%
|
0,4%
|
0,7%
|
Total
sales growth (%)*
|
4,7%
|
4,2%
|
2,3%
|
3,7%
|
|
|
|
|
|
EBITDA*
|
529
|
518
|
471
|
479
|
%
Margin*
|
10,4%
|
9,7%
|
8,7%
|
8,6%
|
|
|
|
|
|
EBITA*
|
286
|
283
|
226
|
227
|
%
Margin*
|
5,6%
|
5,3%
|
4,2%
|
4,1%
|
|
|
|
|
|
Capital
Employed*
|
3 966
|
4 239
|
4 455
|
4 758
|
%
Return on Capital Employed*
|
7,2%
|
6,7%
|
5,1%
|
4,8%
|
|
|
|
|
|
Net capex*
|
210
|
244
|
241
|
289
|
In %
of net sales*
|
4,1%
|
4,6%
|
4,4%
|
5,2%
|
* Alternative Performance Measure (non-IFRS measure). For
additional information, please refer to Capio's Interim Report
January – June 2018 (note 9 on page
25pp and definitions on page 34),
/mbpublicbinaryproxy/Main/277/2578743/881153.pdf, and Capio's
annual report 2017 (note 36 on page 111 and definitions on page
126),
https://capio.com/siteassets/capio.com/investors/reports/capio-annualreport20171.pdf.
The proposed combination of Capio France and Vivalto would form
a strong healthcare provider positioned as the third largest
private operator in France. Capio
France, with its leading position in Modern Medicine and Rapid
Recovery, would contribute to spread and accelerate its medical
know-how for the benefit of Vivalto. Capio France and Vivalto are
currently number three and number four by size in the French
market, and have geographically complementary footprints, with no
significant overlap, each with regional areas of strength, quite
different from the broader national coverage across most regions of
the larger players, Ramsay Générale de Santé and Elsan.
Key terms and conditions of the Share Purchase
Agreement
The following is a summary of the principal terms and conditions
of the Agreement.
Closing conditions
Other than the approval by the Capio shareholders at the
Meeting, the completion of the Transaction would only be
conditional upon the approval by relevant regulatory
authorities.
Consideration
The consideration for the Transaction would be an upfront
enterprise value of MEUR 425 plus an uncapped earn-out contingent
on 2018 financial performance in line with management expectations
outlined in the January – June 2018
interim report, up to a total enterprise value of MEUR 455. This
would imply an EBITDA multiple range of 9.0-9.6x and an EBITA
multiple range of 19.0-20.3x based on Capio France's RTM financials
as of 30 June 2018.
Net proceeds are expected to be between MEUR 400 to 430 after
deducting external net debt transferred and other items including
customary working capital adjustments estimated at in a total MEUR
25, MEUR 16 of which is comprised of Net Debt. In addition, the
deconsolidation of Capio France from the Capio group would also
remove the retirement liabilities related to the French business,
estimated at MEUR 33, from the Capio group's balance sheet.
Of the net proceeds, an estimated MEUR 383-413 are expected to
be received upon closing of the Transaction, which is expected to
occur on 31 December 2018. An
additional estimated MEUR 17 is expected to be received during 2019
following the sale of certain real estate assets.
Warranties
The Agreement contains warranties given by Capio Group Services
in favour of Vivalto SI (as defined below) with respect to Capio
France, which are deemed customary for a transaction of this nature
and size. The warranties mainly relate to the following areas:
ownership of the shares, organisation and due authorisation,
accounts, compliance with laws, licences and consents, litigation,
environmental matters, ordinary course of business, material
contracts, intellectual property rights, insurance, data
protection, tax, properties, employees and related party
transactions.
The general warranty period would be 18 months, with customary
exceptions for certain warranties related to ownership of the
shares, organisation and due authorisation and tax warranties. The
maximum aggregate liability of Capio Group Services for claims
under the warranties would be MEUR 40, with customary exceptions
for breach of certain so called fundamental warranties and specific
tax warranties.
Covenants and post-closing obligations
The Agreement contains customary covenants, where Capio Group
Services e.g. undertakes to procure that Capio France (i) until
closing conducts its business in the ordinary course and (ii) for a
transitional period post-closing, provides certain limited
transitional services required to transfer Capio France to Vivalto
SI in an orderly manner.
The Capio name is not included in the Transaction and Vivalto SI
undertakes to cease all use of Capio's names, marks, signs and
designs and all references to such denominations as soon as
practically possible following closing and, in all material
respects, in no event later than six months after closing.
The Agreement contains a non-compete undertaking applicable to
the Capio group, where the Capio group for thirty-six months
following closing shall not engage in any competing business in
France. Competing business is
defined as any business which would be in competition with the
business of providing healthcare services through private hospitals
and specialty clinics in France,
but does not include primary care by general practitioners.
The Agreement also contains a customary non-solicitation
undertaking in respect of staff applicable to the Capio group for
thirty-six months following closing.
Capio break fee
Capio has undertaken to cover Vivalto SI's costs in relation to
the Transaction by paying its actual costs and expenses up to MEUR
5.0 if the Capio board (i) terminates the Transaction prior to
having convened a Meeting for approval of it; (ii) does not convene
or cancels the Meeting, or (iii) withdraws its proposal or its
unanimous support for approval of the Transaction by the Meeting;
including recommending the Capio shareholders to accept a public
takeover offer for the shares in Capio. This cost-coverage
arrangement has been approved by the Swedish Securities Council in
AMN 2018:31.
Regulatory Approval
The Agreement contains a so called "hell or high water" clause,
which means that Vivalto SI is obligated to take any actions
necessary to ensure approval by the relevant regulatory
authorities. Should Vivalto SI not receive the approval in due time
(see "Termination" below), Vivalto SI is, provided that Capio has
fulfilled its obligations under the Agreement, obliged to cover
Capio's actual costs and expenses up to MEUR 5.0.
Vivalto SI has on 13 September
2018 submitted a pre-filing draft to the French Competition
Authority ("FCA"). Vivalto SI is handling in parallel a request to
the EU Commission to have the case referred back to the FCA. The
pre-filing period should last three weeks in parallel with the
request to the Commission for a referral back. Once Vivalto SI
receives the referral back decision and the green light to formally
file with the FCA, the official Phase I review period will start,
i.e. a 25 business day period at the end of which the FCA should
take its decision (unless a Phase II review would be necessary
which is not expected given the complementary nature of the
respective regional footprints of Capio France and Vivalto and
their limited geographical overlap).
Exclusivity
The Agreement contains a period of exclusivity in relation to
the Transaction or the sale, disposal or business combination of
Capio France ending on the earlier of (i) the closing date and (ii)
the date on which the Agreement is terminated (see below).
A potential or actual public offer for the shares in Capio is
not covered by the exclusivity undertaking and accordingly any
actions in relation to such public offer shall not constitute a
breach of the Agreement.
Parent company guarantees
The Agreement will be entered into between Vivalto Santé
Investissement ("Vivalto SI") and Capio Group Services. Both Capio
and Vivalto have granted parent company guarantees, jointly and
severally guaranteeing the obligations of Capio Group Services and
Vivalto SI, respectively, under the Agreement.
Termination
The Agreement may be terminated prior to closing by either party
in the event that (without the fault of the terminating party)
closing shall not have taken place on 31
December 2018, provided that Vivalto SI may request such
date to be extended until 31 January
2019 if needed to obtain a possible antitrust clearance
before such date.
Governing law
The Agreement is governed by French law. Any dispute arising out
of or in connection with the Agreement shall be finally settled
under the Rules of Arbitration of the International Chamber of
Commerce by one or more arbitrators appointed by the abovementioned
rules.
Indicative timetable
Works Council
consultation process:
|
10 October
2018
|
Signing of Share
Purchase Agreement:
|
11 October
2018
|
Extraordinary General
Meeting:
|
18 October
2018
|
Closing
|
31 December
2018
|
Proposal on extra fees to the Chairman of the Response
Committee Michael Wolf and to the
Chairman of the Finance and Audit Committee Gunilla Rudebjer (Item 8)
The Nomination Committee of Capio, comprising Mikael Moll (Zeres Capital), Chairman,
Per Hesselmark (R12 Kapital),
Per Colleen (Fjärde AP-fonden),
Bo Lundgren (Swedbank Robur fonder),
Jan Särlvik (Nordea Funds) but excluding Michael Wolf (Chairman of the Board), proposes
that extra fees corresponding to 50% of the Board remuneration
approved by the 2018 Annual General Meeting be paid to Michael Wolf and to Gunilla Rudebjer, totalling
SEK 561,000 to Michael Wolf and SEK
204,000 to Gunilla Rudebjer.
The extra fees are intended to compensate for their
extraordinary efforts in relation to Ramsay GDS's public takeover
offer to the shareholders of Capio in their roles as Chairman of
the Response Committee and Chairman of the Finance and Audit
Committee, respectively.
While the proposed extra remuneration is retroactive, the
Nomination Committee does not currently envisage proposing any
other extra compensation as a result of the offer.
C. FURTHER INFORMATION
Use of proceeds from the Transaction
Proceeds from the Transaction will be used partly to pay down
Capio group debt and partly as a return of cash to shareholders.
The return of cash to shareholders is expected to be between BSEK
1.8-2.1, equating to SEK 13-15 on a
current per share basis*. An extraordinary general meeting will be
convened after closing of the Transaction to approve an exact
amount and the proposed route to effect such cash distribution,
which will aim to be advantageous to shareholders from a taxation
point of view.
It is expected that Capio group's debt including the above
mentioned cash return to shareholders will accordingly be reduced
by approximately BSEK 2.5, to an illustrative Pro Forma RTM EBITDA*
leverage multiple of approximately 2.2x based on financials as at
30 June 2018*. Combined, this
represents an attractive cash return whilst ensuring an efficient
capital structure for Capio. Capio will have ample headroom for
further investments, driving digitalisation, specialisation and
competence development in the Nordics for the benefit of patients,
employees and the healthcare systems at large. Capio will also
continue to grow from acquisitions given the strong cash flow
conversion and deleveraging profile of Capio in the Nordics
(including potential future proceeds from the sale of Capio
Germany).
In the new highly cash generative Nordic group, Capio believes
that a financial leverage ratio not exceeding 3.0x RTM EBITDA could
be sustained, with the possibility to temporarily increase the
financial leverage ratio to 3.5x in connection with
acquisitions.
*Assumes 141,159,661 outstanding shares and Pro Forma RTM
EBITDA equal to the Capio group EBITDA less Capio France EBITDA
(MSEK 1,109 – MSEK 479 = MSEK 630) as disclosed in Capio's Interim
Report covering January – June 2018.
Proceeds from the sale of France
are converted at a EUR/SEK rate of 10.4213, as per the currency
rate used in Capio's Interim Report January – June 2018. Potential transaction costs have been
excluded.
The public takeover offer by Ramsay Générale de Santé
("Ramsay GDS") and the Capio Board's formal statement in relation
thereto
On 13 July 2018, Ramsay GDS
announced a public offer to the shareholders in Capio to sell all
of their shares to Ramsay GDS at a price of SEK 48.50 per share (the "Offer"). As a result of
the Offer, completion of the Transaction has been made subject to
approval by the Capio shareholders in accordance with the Swedish
Takeover Act. Furthermore, completion of the Offer is conditional
on Capio not taking any measure that typically is intended to
impair the prerequisites for the implementation of the Offer,
including without limitation entering into an agreement regarding a
divestment of Capio's non-Nordic operations. The Capio Board has
unanimously decided to reject the Offer, which was announced on
13 July 2018.
The Capio Board's formal statement in relation to the Offer,
including key elements of Capio's Nordic only strategy, will be
announced no later than on 11 October
2018 in accordance with the Swedish Takeover Rules and the
Swedish Securities Council's approval in AMN 2018:38. The date of
the Meeting was approved in the same ruling.
D. NUMBER OF SHARES AND VOTES IN THE COMPANY
The total number of shares and voting rights in the company is
141,159,661.
E. INFORMATION AT THE EXTRAORDINARY GENERAL MEETING
At the Meeting, the Board and the Managing Director shall, if
requested by a shareholder and the Board considers that it can be
done without material damage to the company, provide information
regarding issues that may (i) affect the assessment of an item on
the agenda and (ii) concern the company's relation to another group
company. A shareholder may send questions in advance by mail to
Capio AB, "Meeting", P.O. Box 1064, SE-405 22 Gothenburg, Sweden, or by email to
agm@capio.com.
F. PROCESSING OF PERSONAL DATA
For information about the processing of your personal data, see
the section for the extraordinary general meeting 2018 on the
company website www.capio.com.
Gothenburg in September 2018
CAPIO AB (publ)
Board of Directors
Capio AB (publ) is a leading, pan-European healthcare provider
offering a broad range of high quality medical, surgical and
psychiatric healthcare services through its hospitals, specialist
clinics and primary care units. Capio operates in five countries;
Sweden, Norway, Denmark, France and Germany. In 2017, Capio's 13,314 employees
(average full-time equivalents) provided healthcare services during
5.1 million patient visits across the Group's facilities,
generating net sales of MSEK 15,327. Capio operates across three
geographic segments: Nordic (57% of Group net sales 2017),
France (35% of Group net sales
2017) and Germany (8% of Group net
sales 2017). For more information about Capio, please see
www.capio.com.
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Press release
(PDF)
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