Medical institution MD Medical successfully purchases Expert clinic network for a whopping 8.5 billion rubles.
MD Medical Group Acquires "MC Expert" Clinics, Expands Network
The MD Medical Group, which oversees the network of clinics "Mother and Child," has announced the acquisition of 100% of LLC "MC Expert's" capital. This acquisition includes three hospitals and 18 clinics in 13 Russian cities, covering a total area of 33,595 sq. m.
The acquisition encompasses 10 clinical-diagnostic centers in Borisoglebsk, Voronezh, Kaliningrad, Kursk, Rostov-on-Don, Smolensk (2), Tver (2), Tula, Khabarovsk, eight diagnostic centers specializing in MRI and CT services in Kaliningrad (2), Novosibirsk (2), Perm, Shakhty, and Tver, and three hospitals providing 24/7 inpatient care and expanded surgery services in Irkutsk, Novosibirsk, and Perm.
The newly acquired clinics have a capacity for over 2 million specialist visits per year and ensure approximately 20,000 hospital-days annually. The staff count totals 2,900. The revenue of the included clinics for 2024 was a combined 6.4 billion rubles, showing a significant increase from the previous year's 5.4 billion rubles. The deal does not involve bank financing.
The Federal Antimonopoly Service (FAS) has approved the deal, with the transaction amounting to 8.5 billion rubles, to be paid in cash, as per MD Medical Group's statement. This acquisition will enable "Mother and Child" to enter the medical market in four new regions and significantly expand its network of institutions. Additionally, "Mother and Child" will expand its profitability by leveraging the well-developed diagnostic services (MRI and CT) in "Expert's" clinics.
In a statement, Mark Kurtser, CEO of MD Medical Group, explained that the acquisition of "Expert's" assets will fortify their market position, broaden their customer base, increase the volume of services, and boost the Group's revenues. The phased financing of the deal, as outlined in the contract, ensures sufficient funds for both capital expenditures and dividend payments.
Following the acquisition, 43 diagnostic centers in 35 cities across Russia, Armenia, and Uzbekistan will continue operating within the Expert Group, facilitating over one million tomography studies yearly. The revenue of this segment in 2024 was 4.3 billion rubles.
MD Medical Group, which unites 86 modern medical institutions, including 14 multi-profile hospitals and 72 outpatient clinics, has a presence in 35 regions of the Russian Federation. For 2024, the group's revenue was 33.1 billion rubles, with EBITDA at 10.7 billion rubles.
Previously reported by DK.RU, the "Mother and Child" clinic ranked second in the 2023 Forbes ranking, with its revenue growing by 10% year-on-year.
Within the broader healthcare sector, the market for paid medical services is projected to steadily increase, according to the compilers of the rating. From 2017 to 2023, the market has seen an expansion from 4,000 to 9,300 rubles per capita. The National Rating Agency predicts further growth in the volume of paid medical services, reaching 1.62 trillion rubles in 2025 and 1.77 trillion rubles in 2026. However, clinics raised prices by an average of 10% in 2024, placing a strain on insurance companies, potentially prompting them to increase DMS tariffs and potentially encouraging employers to reduce healthcare-related expenses.
It's worth noting that Russia may introduce a rating system for private medical clinics similar to that for hotels, due to the increasing number of complaints about private medical organizations. In the first nine months of 2024, such complaints increased by 15.5%.
Another significant deal in the private clinic market took place at the end of 2024, with "AlfaStrakhovanie" acquiring the one of the oldest networks of private clinics, "Family Doctor," founded in 1995. The deal was worth approximately 700 million rubles.
Enrichment Data:- The Russia cardiovascular devices market is projected to grow from USD 1,284.89 million in 2024 to USD 1,909.99 million by 2032, with a CAGR of 4.5% from 2025 to 2032.- Russia faces a shortage of 23,300 doctors, which can strain healthcare services and impact the quality of care provided.- The healthcare system's reliance on government funding and insurance deductions means that increasing costs can strain state resources and individual budgets.
The acquisition of LLC "MC Expert" by the MD Medical Group broadens their network to include specialized diagnostic services in MRI and CT, enhancing the Group's offerings in the health-and-wellness sector. This expansion is expected to significantly contribute to the Group's revenues due to the well-developed diagnostic services in "Expert's" clinics.
In the broader healthcare sector, the market for paid medical services is predicted to continue growing, providing opportunities for institutions like "Mother and Child" to strengthen their position and expand their services in science-based medicine.
