LOOKING TO GO PUBLIC THIS YEAR MedLife wants to reinvigorate the BSE

Currently in recovery, the Romanian Stock market may receive some help from the MedLife clinic, which has announced its intention to perform an IPO by the end of the year, after an offer to sell 44% of the shares, initiated by the V4C Eastern Europe Holding V Limited ("V4C") fund and by International Finance Corporation ("IFC"), a member of the World Bank Group.

It's been years since the Bucharest Stock Exchange has seen a private IPO on the main market, and the last attempt - the AdePlast IPO - resulted in a resounding failure in 2013.

The average turnover this year has increased to 7.9 million Euros, slightly higher than last year, especially due to the sale of Petrom stock by the Proprietatea Fund, but in some sessions the trades barely exceed 2 million Euros.

Over the last few years, the Bucharest Stock Exchange kept hoping for new IPOs of state companies, and then for an IPO of telecom giant RCS-RDS, which however chose to issue bonds on the London market, at low interest rates, rather than tap the Romanian stock market.

The MedLife clinic had been mulling the idea of an IPO for some time, but yesterday it made an official announcement.

Mircea Ursache, the vice-president of the Financial Oversight Authority, thinks that the MedLife IPO is a good sign for the Romanian stock market.

So far, the intermediaries of the IPO have sent the schedule of the IPO to the ASF and are set to send the prospectus in for approval, which will contain details concerning the price and the structure of the IPO.

According to yesterday's announcement, the IPO will include up to 8,840,480 existing shares, representing up to 44.00% of the total number of existing shares of the company, which will be sold by V4C and IFC: "Private equity fund V4C will sell its entire stake of 36.25%, while IFC will make a partial exit from its current stake of 12.75% in MedLife.

The majority shareholder (the Marcu family) and IFC, concerning the residual stake in MedLife, have agreed to a 6-month lockup".

The company has announced that it will not perform any share capital increase and will not make any money off the IPO.

The offer is addressed at Romanian institutional and retail investors and, through a private placement, to the qualified international institutional investors outside the United States.

The offer is intermediated by Raiffeisen Bank and Wood & Company Financial Services.

MedLife has six line of business: Corporate - provides workforce healthcare and healthcare plans to companies, including Preventive Healthcare Plans; Clinics - provides mobile medical, diagnosis and medical imaging services; Hospitals - provides generic and specialized daytime and ongoing patient hospitalization services; Laboratories - provides a large range of medical biological tests; Drug stores - located in certain clinics or hospitals of the Group, provides drugs and certain complementary products with or without medical prescriptions; Oral medicine - provides a full range of dentistry services.

As of September 30, 2016, the Group operated 36 clinics, 8 generalist and specialized hospitals, 24 laboratories with more than 143 locations for collecting medical reviews, 9 drug stores, 8 oral medicine practices.

MedLife focuses on serving private customers, according to the company: "In 2015 over 88% of its revenues came from cash amounts collected for services and the sale of Healthcare and Prevention Packages, generally to corporate clients".

Last year, the total sales of the Group have amounted to 391 million lei (88 million Euros) with an EBITDA of 55.7 million lei (12.5 million Euros). Sales in the first nine months of 2016 have amounted to 361.5 million lei (80.8 million lei), with an EBITDA of 38.9 million lei (8.7 million Euros).

Starting with 2009, MedLife has opened or acquired 83 clinics.

The current shareholder structure of Medlife is as follows: the Marcu family - 51.0%, private equity fund V4C - 36.25005% and IFC - 12.74995%. The Marcu family won't be selling any shares in the IPO and will continue to own 51% upon its completion. IFC will hold at least 5% of the shares of the company. V4C intends to make a complete exit.

Investment fund Value4Capital (V4C) became a MedLife shareholder in 2009 following a 20 million Euros deal. At the time, the fund was named SGAM - Societe Generale Asset Management. The fund is currently owned by Bill Watson, Piotr Misztal, Jacek Pogonowski.