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ARCHIMED top-ranked buyout fund MED I earns 4.5x on the sale of Vita
October
27,
2023
Over eight years, ARCHIMED supported Vita Health Group management’s vision to transform a low growth, traditional occupational health player into an innovative, fast growing tech-enabled company, providing unrivalled life improvement services.
With the £74 million (€85mn; $90mn) sale of UK-based Vita Health Group (Vita) to publicly-listed Spire Healthcare Group (LSE:SPI), private equity healthcare specialist ARCHIMED earns 4.5 times its total investment, or a 25% annual return over eight years. As one of Britain’s largest occupational healthcare providers, Vita is contracted by companies and insurers to manage therapy, rehabilitation, workforce reinsertion and physical and mental health issues for employees. Spire is an integrated hospital, medical and diagnostics services provider.
Partnering with the firm’s founders – who retained a minority stake – ARCHIMED acquired Vita (then known as RehabWorks) in 2015, buying Right CoreCare from staffing services specialist ManPower Group simultaneously and merging it into RehabWorks. ARCHIMED subsequently engineered the bolt-on acquisitions of Workplace Wellness and Crystal Palace Physio Group, creating one of the UK’s largest integrated providers of general heath, injury and rehabilitation services.
During ARCHIMED’s eight years of financial and strategic support, Vita delivered average annual revenue growth of 33 percent and organic earnings (EBITDA) growth of 49 percent (not including the impact of acquisitions). For the 2024 fiscal year, Vita’s projected revenues and earnings before interest, taxes, depreciation, and amortization are respectively £100 million and £10 million.
Vita’s extraordinary performance under ARCHIMED’s ownership was achieved through critical investment in technology and business development and through strategic actions, including the onboarding of CEO Derrick Farrell and Chairman David Mobbs.
“Given their experience, expertise and connections on both the operational and financial sides of healthcare, ARCHIMED immediately grasped our potential,” says Mobbs. “They developed Vita’s services in line with our most ambitious goals, putting us in pole position to help a larger healthcare group like Spire achieve major synergies.” Mobbs was recruited through MedTalents®, a global network of ARCHIMED-associated senior healthcare executives who identify, facilitate and advise on deals and counsel ARCHIMED’s companies.
The sale of Vita attracted a wide range of both financial and strategic buyers. “With Vita now a major UK occupational healthcare provider, it was clear to us that the best fit for them would be with a strategic buyer like Spire,” says Filmer-Wilson. “We’re very glad we could make that happen.”
Vita is the latest in a string of high-multiple ARCHIMED exits over the past 20 months, all made to strategic buyers. The lowest returning of these seven exits generated 3 times the value of invested capital; the others ranged between 4 and 6 times the cost of investment.
ARCHIMED’s inaugural fund, fully-invested, small-cap-focused MED I, which recorded the Vita return, ranks as the best performing buyout fund on a global scale for the 2014 vintage year, according to data from Preqin, generating 7.2 times invested capital, or a 59 percent annualized return. MED I raised €150 million in 2014 and invested in nine platform companies through majority buyout transactions, followed by numerous bolt-on transactions. Six platform companies have been sold, all to strategic buyers, returning cash equivalent to 5.5 times investors’ total commitments to MED I.
Deloitte acted as M&A advisor and Mills & Reeve as legal advisor to ARCHIMED in the sale of Vita.
“Working with management, we gave Vita a major technology edge, significantly boosting its profit margin in what was otherwise a low-margin, commoditized space,”
Robin Filmer-Wilson, ARCHIMED Partner