mcb teaser - feb
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PREMIER PRIVATE MEDICAL INSTITUTION IN SERBIA
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INVESTMENT OPPORTUNITY IN SERBIA:MEDICAL CENTER BELGRADE (MCB)
Belgrade, February 2011
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INVESTMENT OPPORTUNITY IN SERBIA
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Serbianhealthcaresystem Slide 3
PrincipalideaofMCBbusinessmodel Slide 4
MCBOverview Slide 5-6
LocaEon Slide 7
MCBServices Slide 8
Medicalquipment Slide 9
Hospitalsdailycapacity Slide 10
Projectedcapacityusageandpricing Slide 11
FinancialprojecEons Slide 12
ProposedtransacEon Slide 13
TransacEonEmelines Slide 14
Contacts Slide 15
TABLE OF CONTENTS
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HUGE PROFIT POTENTIAL FOR PRIVATE HEALTHCARE PROVIDERS
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Quality of public healthcare services has been continuously deteriorating in recentdecades, resulting in low level of satisfaction and trust in the healthcare systemby the general public.
Growing public cost of the healthcare system, combined with increasing state
budget deficit and long waiting lists of patients made it apparent to theofcials that the existing healthcare system is not sustainable in the long run.
As a result, a major shift in the healthcare policy emerged in the last two years,recognizing public-private sector partnerships (PPP) as the solution to thisacute problem.
The government started outsourcing healthcare services from the privatesector starting with cardiac surgeries, with plans to expand PPP in othermedical fields where the state has deficient capacities.
SERBIAN HEALTHCARE SYSTEM
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SUCESSFUL BUSINESS MODEL
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MCB started servicing patients in July of 2010, after signing contractswith the State Health Insurance Fund, which utilized over 50% of itscapacity in several fields, such as cardiac diagnostics and surgery.
Engage in public-private sector partnerships (PPP) by developingmedical infrastructure and providing services in those sectors wherethe state has insufcient infrastructural capacity and which requiresubstantial capital investments.
PRINCIPAL IDEA OF MCB BUSINESS MODEL
Up to date, MCB has performed and collected funds from the state forover 280 open heart surgeries.
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SOUND FOUNDATION FOR DEVELOPMENT
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MCB OVERVIEWMCB was founded by Mr. Dragan Pavlovic and hiswife. Mr. Pavlovic is a prominent Serbianbusinessman with more than 25 years ofprofessional experience.
MCB founders own 100% of equity in the business.
The MCB building is designed on 6,000 m2 spread
over four levels. Based on citys urban plan andthe building permit, MCB may be enlarged byadditional four levels (5,000 m2), which wouldtotal 11,000 m2.
There are two vacant parcels that are adjacent tothe land area of MCB, which oers excellentpotential for further development.
MCB currently employs 132 people, out of which35 are MDs; 68 are nurses and medicaltechnicians; 2 pharmacists; 1 biochemist; 26 areadministrative and other supporting sta. Medicalsta is fluent in English.
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HIGH QUALITY FACILITY AND OUTSTANDING PATIENT CARE
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MCB OVERVIEW cont.
Expert team of BMC
comprises outstandingexperts in their respectivefields
The entire center isequipped using the verylatest medical technology
Top quality construction andattention to details resultedin outstanding premises withpleasant interior
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7LOCATION, LOCATION, LOCATION
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LOCATIONMBC is located in the heart of New Belgrade, with excellent access to major
roads, highway/corridor 10, downtown, airport and has its own parking formore than a hundred vehicles.
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8FULL SPECTRUM OF MEDICAL SERVICESALL IN ONE PLACE
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Internalmedicine
Interventional cardiology
Surgery Radiology
Gynecology Urology Orthopedics Pediatrics
Otorhinola-ryngology
Neurology Psychiatry Dermatovene
-rology
OccupationalMedicine
Physicalmedicine andrehabilitation
LaboratoryAnesthesio-
logy andResuscitation
MCB SERVICES
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9LATEST GENERATION OF MEDICAL EQUIPMENT AND TOOLS
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Cardiology units: ECG devices, ECGholters, Holter CA, Ergometry(TREDMIL), Spirometry, defibrillators
SCHILLER
The Central sterilization (Autoclavesand trainers, washing machine tools)
GETTINGE
Separation of medical gasesMESSER, DRAEGER
Operating tableOPT
Anesthesia machines, operating lamps,monitoring of the patients, respirators,complete intensive care, Stocker,machines for bloodstream out of body
DRAEGER
Laparoscopic and endoscopicequipment,Martin, SCAN LINE,Surgicalinstruments
RICHARD WOLF
Xario,Nemio XGULTRASOUND DIAGNOSTICS -TOSHIBA
RTG QUANTUM,RTG ULTIMAX,CT MSAQUILION 64,MAMMOGRAPH PLAMED -CR DIGITIZATION,MRI 1.5 T,ANGIOROOM with electrophysiology INFINIX
RADIOLOGY - TOSHIBA
NICON Microscopes,NARASHIGE micromanipulators,HEREUS -
incubators
IVF CENTER
Patients' beds with 2 and4sectionsGIVAS - ITALY
MEDICAL EQUIPMENT
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10HIGH VOLUME AND SUPREME SERVICE
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HOSPITALS DAILY CAPACITY
Radiology
Up to 200 complex diagnosticprocedures per day
Surgery
More than 60 surgicaltreatments per day (general,
cardiac, vascular,laparoscopic,gynecological, urological,oncologyical, orthopedic andcosmetic surgery)
IVF center
Up to 2 procedures per day
Interventionalcardiology
up to 30 treatments per day
Reviews
Up to 330 reviews of doctors
specialists per day in thefollowing fields:ophthalmology, gynecology,radiology, internal medicine,otolaryngology and others
Procedures
Up to 12 endoscopyprocedures and 4 punctureprocedures
With 7 operating rooms, 74 beds, 7 intensive care, MCB is capable of performing largenumber of diagnostic reviews, surgery treatments and other medical services.
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11CONSERVATIVE USAGE SCENARIO
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PROJECTED PRICING AND CAPACITY USAGEAverage projected price per service
(EUR) Year 1 Year 2 Year 3 Year 4 Year 5 Average Daily Capacity Usage Year 1 Year 2 Year 3 Year 4 Year 5
Magnetic Resonance 200 200 180 160 160 Magnetic Resonance 30% 40% 60% 80% 90%
CT Scanner 200 200 180 160 160 CT Scanner 30% 40% 60% 80% 90%
RTG Quantum Bucky 10 10 9 8 8 RTG Quantum Bucky 30% 40% 60% 80% 90%
RTG-Oscopy 130 130 117 104 104 RTG-Oscopy 30% 40% 60% 80% 90%
Mammography 50 50 45 40 40 Mammography 30% 40% 60% 80% 90%
Ultimax Scanner 100 100 90 80 80 Ultimax Scanner 30% 40% 60% 80% 90%
Angiography 1,000 1,000 900 800 800 Angiography 30% 40% 60% 80% 90%
Endoscopy 10 10 9 8 8 Endoscopy 30% 80% 100% 100% 100%Smaller gynecology interventions 296 296 266 237 237 Smaller gynecology interventions 30% 80% 100% 100% 100%Smaller surgical interventions 325 325 293 260 260 Smaller surgical interventions 30% 80% 100% 100% 100%Puncture section 160 160 144 128 128 Puncture section 30% 80% 100% 100% 100%Polyclinic 50 50 45 40 40 Polyclinic 30% 40% 60% 80% 90%
General Surgery section 1,990 1,990 1,791 1,592 1,592 General Surgery section 30% 40% 60% 80% 90%
Apartment section/rooms 200 200 180 160 160 Apartment section/rooms 30% 70% 70% 70% 70%
Beds 90 90 81 72 72 Beds 60% 60% 65% 70% 70%
Cardio Surgery 6,200 6,200 5,580 4,960 4,960 Cardio Surgery 80% 85% 90% 100% 100%
Eye Surgery 1,200 1,200 1,080 960 960 Eye Surgery 30% 40% 60% 80% 90%
IVF section 2,500 2,500 2,250 2,000 2,000 IVF section 30% 40% 60% 80% 90%
Laboratory 1.50% 1.50% 1.50% 1.50% 1.50%
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12REALISTIC GROWTH POTENTIAL BASED ON CONSERVATIVE USAGE SCENARIO
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FINANCIAL PROJECTIONS
EUR 2011 2012 2013 2014 2015
Operating revenues 17,338,489 22,616,339 27,195,982 30,449,766 33,482,833
Operating costs (excluding
depreciation and equipmentrent costs)
11,811,664 14,404,316 16,923,746 19,146,463 20,586,284
EBITDA 5,526,825 8,212,023 10,272,236 11,303,303 12,896,549
EBITDA Margin 31.88% 36.31% 37.77% 37.12% 38.52%
Depreciation andequipment rent
1,640,000 1,640,000 1,640,000 1,640,000 1,640,000
EBIT 3,886,825 6,572,023 8,632,236 9,663,303 11,256,549
EBIT Margin 22.42% 29.06% 31.74% 31.74% 33.62%
f
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13INVESTMENT OPPORTUNITY IN SERBIA
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The owner is looking for a reputable strategic investorprepared to take equity stake and add value to MCB bycapital increase, transfer of knowhow and developmentof additional capacity. Preferably, the investor will have
long history of proven track record of successfulmanagement in private healthcare industry.
The owner will consider majority or minority equityoptions with various scenarios of acquisitions
encompassing: building, equipment and business.
PROPOSED TRANSACTION