Pihlajalinna acquires Pohjola Hospital Ltd
Pihlajalinna Plc Inside Information 2 July 2021 at 8:00 a.m.
Pihlajalinna acquires Pohjola Hospital Ltd
Pihlajalinna Terveys Ltd, part of Pihlajalinna Group, has agreed to acquire the entire stock of shares of Pohjola Hospital Ltd from its current owner Pohjola Insurance Ltd. The net debt-free purchase price, paid in cash, is EUR 31.8 million.
In connection with the acquisition, Pihlajalinna will also sign a new five-year service agreement with Pohjola Insurance. Already, Pihlajalinna has previously partnered with Pohjola Insurance within the national multi-producer model. The service agreement to be signed in connection with the acquisition also covers a wide range of health services other than those offered by the acquired company.
Group CEO Joni Aaltonen considers that the acquisition of Pohjola Hospital will strengthen Pihlajalinna's competitiveness in both the public and private health services markets:
– In line with Pihlajalinna's growth strategy, we aim to expand our network of locations and range of specialised health care services in all regions, especially in areas with higher population density. Pohjola Hospital can boast with modern locations in Finland's largest cities and a top quality surgical operations process. Treatment chains producing genuine health benefits with related sports services, as well as digital services and illness prevention, will continue to be at the heart of our development work going forward. Pohjola Hospital produces a service called Health Advisors for customers of Pohjola Insurance, and I am delighted to incorporate it as part of our operations as well.
– The coronavirus pandemic had some impact on the company's operational volumes and profitability for the previous year and the beginning of this year. We now have a detailed plan in place to expand operations and range of services as well as to improve profitability. Synergies from combining operations, especially in terms of facilities and refinancing of machinery and equipment, as well as increasing volumes and increasing capacity, are key points to achieve this, Aaltonen says.
− This acquisition has no impact on Pihlajalinna's other existing contracts with insurance companies, on the contrary, our service offering continues to expand and our services are available to all our partners, Aaltonen says.
Established back in 2013, Pohjola Hospital is a chain of hospitals specialising in orthopaedics, i.e. treatment of musculoskeletal disorders and accidents. The company's net revenue was EUR 59.4 million in 2020 and EUR 74.2 million in 2019. The company's largest customer is Pohjola Insurance Ltd. More detailed financial information for the company is presented at the end of this stock exchange release. Pohjola Hospital operates in five cities with university hospitals: Helsinki, Tampere, Turku, Oulu and Kuopio. The company employs approximately 270 people and more than 300 individual subcontracted professionals.
− We do believe that Pohjola Hospital’s operations can be developed further in the future better as part of a significant Finnish player in the field. Also, with this co-operation now getting established, Pohjola Insurance will continue to be able to provide their healthcare insurance customers with high-quality and even more comprehensive healthcare services through their extensive partnership network, says Olli Lehtilä, Chief Executive Officer of Pohjola Insurance.
Finnish Competition and Consumer Authority will be notified of this business acquisition arrangement. The acquisition will be implemented after the Finnish Competition and Consumer Authority’s approval, and its estimated time of completion is at the turn of year 2021–2022. Therefore, the acquisition will have no impact on Pihlajalinna’s outlook for the current year. The acquisition supports Pihlajalinna's long-term financial goals for operating profit (7%) and net gearing (under 3 x EBITDA). Pihlajalinna Group will publish more detailed information on the impact of the acquisition on its strategy and goals in early autumn.
Financial information, Pohjola Hospital Ltd
Performance summary (FAS)
| € 000 | 2018 | 2019 | 2020 | 1–4/2020 | 1–4/2021 |
| Revenue | 73 295 | 74 165 | 59 392 | 20 862 | 21 153 |
| Other operating income | 378 | 12 962 | 589 | 265 | 287 |
| Materials, supplies and goods | (8 109) | (8 332) | (7 058) | (2 529) | (2 487) |
| External services | (32 432) | (32 072) | (23 934) | (8 408) | (8 377) |
| Materials and services | (40 541) | (40 404) | (30 992) | (10 937) | (10 864) |
| Personnel expenses | (13 142) | (14 932) | (14 093) | (4 870) | (5 156) |
| Other operating expenses | (31 409) | (26 991) | (24 196) | (7 889) | (8 337) |
| EBITDA | (11 418) | 4 798 | (9 300) | (2 570) | (2 917) |
| Depreciation, amortisation and impairment | (277) | (408) | (664) | (203) | (233) |
| Operating profit | (11 695) | 4 390 | (9 964) | (2 772) | (3 150) |
| Result before extraordinary items | (11 701) | 4342 | (9 998) | (2 795) | (3 160) |
Balance Sheet Summary
| € 000 | December 2018 | December 2019 | December 2020 | April 2020 | April 2021 |
| Non-current assets | 1 555 | 1 928 | 1 498 | 1 674 | 1 299 |
| Trade receivables | 7 628 | 5 136 | 5 370 | 5 844 | 5 736 |
| Other receivables and accrued income | 1 735 | 1 763 | 487 | 788 | 1 102 |
| Cash and cash receivables | 9 785 | 10 379 | 10 693 | 6 657 | 8 313 |
| Current assets | 19 148 | 17 278 | 16 551 | 13 288 | 15 151 |
| Total assets | 20 702 | 19 206 | 18 049 | 14 962 | 16 450 |
| Equity | 7 613 | 10 982 | 11 049 | 8 187 | 7 889 |
| Trade payables | 947 | 2 203 | 552 | 789 | 1 257 |
| Other liabilities and accrued liabilities | 7 543 | 5 928 | 6 421 | 5 898 | 7 276 |
| Total liabilities | 20 702 | 19 206 | 18 049 | 14 962 | 16 450 |
Further information:
Joni Aaltonen, CEO, Pihlajalinna Plc
Please direct all call requests through Pihlajalinna’s communications:
Taina Lehtomäki, Communications Manager, tel. +358 50 451 3678 or taina.lehtomaki@pihlajalinna.fi
Distribution:
Nasdaq Helsinki
Major media
investors.pihlajalinna.fi
Pihlajalinna in brief:
20-year-old Pihlajalinna is one of the largest private social and healthcare services providers in Finland. The company serves private individuals, businesses, insurance companies and public sector entities, such as municipalities and joint municipal authorities. Pihlajalinna is under Finnish ownership and we pay all our taxes in Finland.
Pohjola Insurance in brief:
Pohjola Insurance is Finland’s leading non-life insurer with a total of 2.5 million private and corporate customers. It provides an extensive range of non-life insurance services to private, corporate and institutional clients. Pohjola Insurance is part of OP Financial Group which is Finland's largest financial services group.