Bain-Backed Intermedica Has Eight Targets in Acquisition Spree

(Bloomberg) -- Brazilian health-care provider Notre Dame Intermedica Participacoes SA is in talks for eight potential acquisitions, according to a person familiar with the matter.

Intermedica has signed non-disclosure agreements for the eight deals, and three are in the due diligence stage of review, said the person, who asked not to be named because the information isn't public yet. Last week, the company agreed to buy Ghelfond Group for 240 million reais ($63 million), and earlier this year announced the purchases of Hospital AMIU and dental insurance firm Belo Dente.

Intermedica declined to comment, citing a quiet period prior to its earnings release.

Brazil's health-care industry has been shifting in favor of players that offer a complete range of services and focus on more proactive and predictive approaches, such as Intermedica and Hapvida Participacoes e Investimentos SA. Intermedica, which offers health and dental plans, has 21 hospitals, 75 clinical centers and 20,000 employees.

Bradesco BBI, which reiterated its outperform rating and increased Intermedica's price target earlier this month, said the acquisition of Ghelfond is “strategically” sensible. “We expect such moves of vertical consolidation to accelerate in the healthcare landscape with diagnostics providers and hospitals as potential targets, given the value in integrating operations,” analysts led by Fred Mendes wrote in an report last week.

Shares of Intermedica have gained 165% since its initial public offering in April 2018, while the Ibovespa index rose 19% during the same period. Bain Capital acquired the company in 2014 and remains the largest shareholder even as it has been reducing its stake.

To contact the reporter on this story: Vinícius Andrade in São Paulo at vandrade3@bloomberg.net

To contact the editors responsible for this story: Brad Olesen at bolesen3@bloomberg.net, Catherine Larkin, Steven Fromm

©2019 Bloomberg L.P.