Terveystalo Plc Stock Exchange Release 17 May 2018 at 09:00 EEST

 Terveystalo Plc (“Terveystalo”) has today, on 17 May 2018, signed an agreement to acquire the Finnish healthcare operations of Attendo AB (publ) (“Attendo”) (the “Transaction”). If completed, the Transaction brings together two unique, industry leading healthcare companies that complement each other in terms of people, culture and competences. Attendo‘s Finnish healthcare operations would gain a strong Finnish owner in the transaction. The operations have an excellent strategic fit with Terveystalo‘s occupational healthcare and private and public operations and they strengthen and complement the services offered to different customers. The Transaction ensures large and complementary pool of physicians, other healthcare professionals and personnel. The highly complementary Transaction would improve Terveystalo‘s competitiveness and growth opportunities particularly within services offered to the public sector. The completion of the Transaction is expected to take place late 2018, and is subject to approval by Finnish Competition and Consumer Authority.                   

Terveystalo has strongly invested in quality and digital platforms. Terveystalo‘s centralized and scalable services and systems combined with the high quality and cost-efficient services to public sector customers of Attendo‘s Finnish healthcare operations will provide significant earnings leverage. Based on the 2017 financials, Terveystalo and Attendo‘s Finnish healthcare operations had combined revenue of EUR 924.4 million, adjusted EBITDA of EUR 112.4 million excluding synergies, adjusted EBITA of EUR 90.5 million excluding synergies and a total number of highly skilled physicians, other healthcare professionals and personnel of over 12,000.[1] (For basis of preparation see “Selected illustrative aggregated financial information”.)

“The Transaction is a major milestone in building healthcare services for the Finnish people. Regardless of the SOTE reform, skilled healthcare professionals will continue to be a critical success factor for our growth. The Transaction strengthens our strategy as a focused healthcare service provider and brings together two unique healthcare service platforms that complement each other well in terms of people, culture, competences, service offering and geographical footprint. With this Transaction, Terveystalo would also gain a lot of business and services that we do not currently have in our portfolio and which we would like to develop and grow. With this transaction we expect to create substantial value for our shareholders while the Finnish people benefit from a stronger, nationwide operator capable of delivering cost-effective and versatile physical and digital services to the needs of different customer groups and for the citizens in different stages of life.” says Yrjö Närhinen, CEO of Terveystalo. 

“Through the Transaction we will be able to offer a large variety of specialty areas and career opportunities for both physicians and other healthcare professionals. Attendo‘s Finnish healthcare operations have been an attractive employer especially among young professionals and Terveystalo has the possibility to provide a lifelong career where people can work seamlessly within both public and private sectors across multiple locations. Professionals can also benefit from our training and development opportunities and utilize our industry-leading digital solutions. We are at the forefront of improving the quality and effectiveness of care and the quality of life of the Finnish people and I am excited to have Attendo professionals to join our team for this journey.” says Johanna Karppi, Senior Vice President, HR of Terveystalo.


Strong rationale and strategic fit


Key benefits of the Transaction

 ·         Customers


Overview of Attendo‘s Finnish healthcare operations

Attendo‘s Finnish healthcare operations include primary care, specialist care, staffing and dental clinics and have revenue of EUR 235 million and adjusted EBITA margin of 7.5% in 2017. Approximately half of the revenue came from public pay and dental care outsourcings (seven full outsourcings under the “Kuntaturva” brand and 13 outsourced health centers) where Attendo‘s Finnish healthcare operation is the market leader with high quality and cost-efficient operations. Revenue from staffing operations was EUR 78 million in 2017. The remaining share of revenue is divided in private dental care and occupational healthcare. Approximately 85% of the services provided were publicly funded in 2017. The Finnish healthcare operations‘ staffing pool of general practitioners, specialists and dentists amounts to approximately 2,600 professionals.


Selected illustrative aggregated financial information

Basis of preparation

The aggregated combined financial information is for illustrative purposes only. The combined financial information gives an indication of the combined sales and earnings assuming the activities were included in the same company from the beginning of the financial year 2017. The aggregated combined financial information is based on a hypothetical situation and should not be viewed as pro forma financial information as purchase price allocation, transaction costs and differences in accounting principles have not been taken into account.


Key Figures

EUR million Terveystalo1 Attendo‘s Finnish healthcare operations 2 Combined 1-12/2017       Revenue 689.5 234.9 924.4 Adj. EBITDA 92.4 20.0 112.5 Adj. EBITDA margin (%) 13.4 8.5 12.2 Adj. EBITA 73.0 17.5 90.5 Adj. EBITA margin (%) 10.6 7.5 9.8         As at 31/12/2017       Personnel & private practitioners ~8,696 >3,7003 >12,000 OH end customers 680,000 38,000 718,000 Clinics and health centres 180 42 222 Dental units 18 35 53

1 The Group made a number of business acquisitions in 2017. The financial statements of Porin Lääkäritalo Oy Group and Diacor terveyspalvelut Oy Group have been included in the consolidated financial statements of Terveystalo from the beginning of January 2017 and the end of March 2017, respectively.

2 Unaudited carve out financial information, which has been prepared on a “carve out” basis and does not necessarily reflect what the combined results of operations would have been, had Attendo‘s Finnish healthcare operations operated as an independent group and had it presented stand-alone financial information under IFRS during the period presented.

3 Physicians, other healthcare professionals and personnel that work for or provide services to Attendo‘s Finnish healthcare operations.


Shareholder value creation and financial impact

The Transaction is expected to create opportunities for value creation through operational efficiency improvements and synergies. The Transaction is expected to realize cost synergies particularly through procurement, sharing best practices and harmonization of operations. The estimated expected cost synergies from the Transaction are EUR 5 million per year, which are expected to be implemented within 12 months from the completion of the Transaction. In addition, one-time synergy implementation costs are expected to be approximately EUR 5 million. Transaction costs are expected to be approximately EUR 7 million.

In addition to the quantified cost synergies, Terveystalo has identified significant potential for value creation through operative strategic synergies, many of which are actionable from closing. These include for example: i) utilization of Attendo‘s Finnish healthcare operations‘ staffing pool and its well established recruitment and HR operations in Terveystalo‘s current operations; ii) leveraging Terveystalo‘s competencies and accumulated experiences in developing Attendo‘s Finnish healthcare operations‘ OH and dental operations; iii) offering the complementary, more comprehensive service scope to the combined company‘s customer base; and iv) optimizing services and offering to existing and new customers. Moreover, the combined company will be a stronger partner for the public sector going forward and the Transaction is expected to improve the combined company‘s competitiveness in the public healthcare outsourcing business. Further, the Transaction is estimated to enable additional savings through opex savings and capex synergies for the combined company.

The Transaction is expected to be EPS accretive from the first full calendar year following the completion of the Transaction.


Consideration and financing

The Transaction is valued at EUR 233 million on a cash and debt free basis (enterprise value).The implied EV/Adjusted EBITA 2017 multiple paid in the Transaction is 13.3x and 10.6x including fully realized estimated run-rate cost synergies (enterprise value adjusted for approximately EUR 5 million of expected non-recurring implementation costs).

Terveystalo is financially well-prepared for the Transaction. Based on the aggregated combined financial information, Terveystalo would have had a preliminary aggregated net debt of EUR 479 million with implied net debt to EBITDA of 4.0x as of 31 March 2018 (aggregated LTM adjusted EBITDA), excluding synergies.

The current lending banks of Terveystalo have arranged committed debt facilities for the purposes of financing the Transaction.



Terveystalo is advised by Skandinaviska Enskilda Banken AB (publ) Helsinki Branch as financial advisor, and Avance Attorneys Ltd as legal advisor in the Transaction.



Terveystalo will hold a Finnish-language briefing and live webcast on May 17, 2018, starting at 11:00 a.m. EEST, at Terveystalo Piazza, Jaakonkatu 3B (3rd floor), 00100 Helsinki, Finland.

The English audiocast and conference call will be held at 12:30 Finnish time. You can follow the Finnish webcast at:


The English audiocast is available at:


To ask questions, please join the telephone conference 5-10 minutes prior to the start time using your local number (FI: +358 (0)9 7479 0360, UK: +44 (0), US: +) and the Participant Passcode 546107. If you are calling from another location, please use any of the numbers above.


Terveystalo Plc


Kati Kaksonen, Director, Investor Relations and Financial Communications
Tel. +358 10 345 2034

Nasdaq Helsinki Oy
Main media

Terveystalo in brief

Terveystalo is a listed company on the Helsinki Stock Exchange. Terveystalo is the largest healthcare service company in Finland with net sales and network. The company offers versatile primary and secondary health care services for corporate and private customers and the public sector. The nationwide network covers approximately 180 locations across Finland, complemented by 24/7 digital services.

In 2017, the Company had approximately 1.2 million individual customers and approximately 3.3 million doctor visits. Nearly 9,000 healthcare professionals work in Terveystalo, about half of whom are private practitioners. Terveystalo is a member of Association for Finnish Work. www.terveystalo

Attendo – the leading care and healthcare company in the Nordics

Attendo is the leading private provider of publicly financed care and healthcare services in the Nordic region. The company was founded in 1985 and was first to provide outsourced care for older people in Sweden. In addition to care for older people, Attendo provides care for people with disabilities, individuals and families, and, in Finland, healthcare and dental care. Attendo has more than 24,000 employees and is locally anchored with over 700 operations in more than 200 municipalities in Sweden, Finland, Norway and Denmark. www.attendo


This announcement includes forward-looking statements which include statements regarding Terveystalo‘s business strategy, financial condition, profitability, results of operations and market data, as well as other statements that are not historical facts. Words such as “believe,” “anticipate,” “plan,” “expect,” “target,” “estimate,” “project,” “predict,” “forecast,” “guideline,” “should,” “aim,” “continue,” “could,” “guidance,” “may,” “potential,” “will,” as well as similar expressions and the negative of such expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying these statements. By their nature, forward-looking statements are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected. Readers are cautioned not to place undue reliance on these forward-looking statements. Except for any ongoing obligation to disclose material information as required by the applicable law, Terveystalo does not have any intention or obligation to publicly update or revise any forward-looking statements after it distributes this announcement, whether to reflect any future events or circumstances or otherwise.

[1] Of the total number of 12,000 over 3,700 are physicians, other healthcare professionals and personnel that work for or provide services to Attendo‘s Finnish healthcare operations.


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