Healthcare Holding Schweiz AG, a Prominent Swiss Medtech Services and Distribution Group Managed by Winterberg Advisory and KKA Partners, Expands its Portfolio with the Acquisition of MVB Medizintechnik AG based in Frick.
Baar, Switzerland – October 2024
Healthcare Holding Schweiz AG (“Healthcare Holding”) has successfully completed the acquisition of MVB Medizintechnik AG (“MVB”), enhancing its portfolio with specialized expertise in cardiotocography for gynecology and obstetrics, alongside innovative products in shock wave therapy, thereby strengthening its market position in both women’s health and therapeutic devices.
Fabian Kroeher, President of the Board of Healthcare Holding Schweiz and Partner at Winterberg Advisory GmbH, stated, “We are excited to welcome MVB Medizintechnik AG into the Healthcare Holding family. This acquisition not only broadens our product offerings but also enhances our capability to deliver tailored solutions to our customers. The integration of MVB’s specialized knowledge and innovative products will significantly contribute to our growth strategy.”
Both Günter Dreikorn and Henry Brülhart, the previous owners of MVB, will remain with the company to ensure continuity and maintain the high standards of service that MVB’s customers have come to expect.
“I am very pleased that we found a new home for MVB, which will provide us with everything to thrive and even accelerate our growth,” said Günter Dreikorn. “This partnership will allow us to leverage combined strengths and resources, ultimately making us even better to serve our customers at the highest standards.”
With this acquisition, Healthcare Holding Schweiz reinforces its position as the market leader in Medtech services and distribution in Switzerland. Already managing a diverse portfolio, the company continues to showcase its strategic expertise and commitment to excellence, driving sustained growth and innovation in the Swiss healthcare sector.
About MVB Medizintechnik AG
MVB Medizintechnik AG, based in Frick, Switzerland, is a specialized distributor in the fields of cardiotocography (CTG) for gynecology and obstetrics, and shock wave therapy, offering a range of CTG products and other gynecological devices, as well as advanced shock wave devices and other innovative products for women’s health.
About Healthcare Holding Schweiz AG
As a leading player in the Swiss Medtech services and distribution sector, Healthcare Holding Schweiz AG based in Baar, Switzerland is focused on growing its portfolio through strategic acquisitions and partnerships. It is committed to innovation and customer satisfaction, aspiring to redefine industry standards with state-of-the-art solutions and exceptional service. To date, the group has acquired Senectovia Medizinaltechnik AG based in Urdorf, Winther Medical AG based in Baar, Mikrona Group AG based in Schlieren with its business units Mikrona and Ortho Walker, MCM Medsys AG based in Solothurn, and Naropa Reha AG based in Staad, St. Gallen.
About Winterberg Advisory GmbH and Winterberg Group AG
Based in Gruenwald, Germany, Winterberg Advisory GmbH manages Private Equity investment funds, mainly concentrating on Small and Midcap Buy and Build platforms such as Healthcare Holding Schweiz AG. Winterberg Group AG, located in Zug, Switzerland, is an independent family office that invests in Small and Midcap Private Equity, along with selective ventures in real estate and other asset classes.
For media inquiries, please contact presse@healthcare-holding.ch.
Note to Editors: Please credit Winterberg Group for all references to provided quotes and information.
For further information about MVB Medizintechnik AG visit www.mvb-med.ch.
For further information Healthcare Holding Schweiz AG, please visit www.healthcare-holding.ch.
For Healthcare Holding’s portfolio companies visit www.senectovia.ch, www.winthermedical.ch, www.mikrona.ch, www.orthowalker.ch, www.mcm-medsys.ch and www.naropa-reha.ch
For more information about KKA Partners visit www.kkapartners.com and about Winterberg www.winterberg.group.
This press release is prepared and distributed by Winterberg Advisory GmbH on behalf of Healthcare Holding Schweiz AG.
Switzerland’s MedTech industry has long been a cornerstone of healthcare innovation, generating 24 billion Swiss francs in 2023 and employing over 70,000 people. Swiss distributors of medical devices are key players in this ecosystem, ensuring hospitals and clinics have access to cutting-edge medical products. However, the introduction of the EU Medical Device Regulation (MDR) in 2021, coupled with the discontinuation of Switzerland’s Mutual Recognition Agreement (MRA) with the European Union, has significantly complicated the landscape, placing new burdens on Swiss distributors who must now navigate a tougher regulatory environment.
Ensuring Compliance: The Evolving Role of Swiss Distributors Amid Regulatory Challenges
While Swiss distributors don’t certify products themselves, they are responsible for ensuring that the devices they distribute comply with Swiss regulations set by Swissmedic. Since Switzerland is no longer part of the Mutual Recognition Agreement (MRA) with the EU, manufacturers of MDR-certified products must appoint a Swiss Authorized Representative (CH-REP) to register their products with Swissmedic before selling them in Switzerland. This regulatory step adds complexity, as distributors must coordinate with both manufacturers and CH-REPs to confirm product registration and approval for the Swiss market. According to Fabian Kroeher, Managing Partner at Winterberg Group, this process often results in significant administrative burdens, particularly when manufacturers lack complete data on their portfolio’s registration status in Switzerland. This further complicates the distributor’s role in maintaining compliance and ensuring product availability without unnecessary delays.
Ensuring Product Availability: Navigating Delays, Re-certifications and Limited Innovation Access
The introduction of the EU Medical Device Regulation (MDR) has had a significant impact on the portfolios of medical device distributors. Under the MDR, stricter requirements for product certification, post-market surveillance and clinical evaluation have significantly increased the complexity and cost of bringing new medical devices to market. In addition to these challenges, existing products that were previously certified under older regulations must also undergo re-certification to remain available. This dual burden of re-certifying existing products while meeting requirements for new innovations has caused significant delays in product availability. As a result, distributors may face shortages in certain devices or be forced to discontinue offering products that manufacturers opt not to re-certify due to the high costs and regulatory hurdles imposed by the MDR.
The time and cost of MDR compliance have led many manufacturers to prioritize high-margin devices, often at the expense of smaller or niche products. This reduction in product variety limits distributors’ access to the full range of devices they previously offered. As a result, they must navigate a more limited and potentially more expensive selection, making it harder to maintain a competitive and comprehensive portfolio that meets healthcare providers’ diverse needs.
Increased time and costs of MDR compliance have led many manufacturers to prioritize launching innovations in markets with faster regulatory approvals. As a result, new technologies often launch in the U.S. before reaching the EU and Switzerland, delaying distributors’ ability to provide cutting-edge products to healthcare clients.
A Call for Swiss Regulatory Reform: Implementing Motion 20.3211
In response to the growing regulatory challenges, many industry stakeholders are advocating for the Swiss Federal Council to adopt the framework established by Motion 20.3211, which was passed by the Swiss Parliament. The motion calls for Switzerland to recognize FDA-certified medical devices, allowing such products to be approved for the Swiss market. This measure could alleviate regulatory bottlenecks, reducing the time and cost for Swiss distributors to ensure compliance with new and re-certified products. According to Fabio Fagagnini, CEO of Healthcare Holding Schweiz AG, recognizing FDA-approved medical devices “would be a game changer for the industry”. He emphasizes that this reform would drastically reduce delays and allow Swiss healthcare providers faster access to cutting-edge technologies. With the current MDR framework and the loss of the MRA with the EU, product availability has lagged behind as manufacturers understandably prioritize larger markets. Fagagnini argues that by adopting Motion 20.3211, “Switzerland could maintain its competitive edge in the MedTech space, ensuring we’re not left behind in terms of innovation and quality care”. The reform would simplify supply chains, mitigate shortages and help distributors deliver better outcomes for Swiss patients.
Navigating Regulatory Challenges: Proactive Strategies for Swiss Distributors in the MedTech Industry
To navigate the increasingly complex regulatory landscape and maintain competitiveness, Swiss distributors must adopt proactive strategies to adapt and thrive:
- Build Regulatory Expertise and Offer CH-REP Services
Given the growing importance of regulatory compliance, Swiss distributors can invest in developing in-house regulatory expertise. By offering Swiss Authorized Representative (CH-REP) services to manufacturers, distributors can position themselves as key partners in helping foreign companies bring their products to the Swiss market. This not only adds value to the distributor’s portfolio but also strengthens relationships with manufacturers by streamlining the compliance process.
- Scout for FDA-Approved Products Early
With the potential adoption of Motion 20.3211, which would recognize FDA approvals in Switzerland, Swiss distributors should begin scouting for innovative FDA-approved products in advance. Establishing early contact with manufacturers will allow distributors to be at the forefront when these products become available in Switzerland, ensuring a competitive edge and faster access to cutting-edge technologies.
- Enhance Product Portfolio Management Tools
Investing in advanced portfolio management tools that track regulatory status and registration of devices across markets can help distributors stay ahead of compliance issues. These tools allow distributors to monitor which products are certified or registered for the Swiss market, ensuring more efficient portfolio management and avoiding potential gaps in product availability.
By adopting these strategies, Swiss distributors can stay agile, enhance their services and navigate the evolving regulatory landscape, ensuring Swiss healthcare providers have timely access to diverse, high-quality medical devices.
At Winterberg Group AG, we understand the importance of robust infrastructure and systems for driving growth within our portfolio companies. As a private equity player focused on Buy & Build platforms, we continuously seek to enhance operational efficiency across our investments. One such platform is Healthcare Holding Schweiz AG, a medical equipment distribution group that is part of Winterberg’s growing portfolio.
Recognizing the transformative potential of Salesforce, we implemented it across Healthcare Holding’s entities to strengthen customer relationships, streamline operations and drive scalability. In this article, we share the key challenges we encountered during the critical kick-off phase of Salesforce implementation and how other SMEs can avoid similar pitfalls.
“The Salesforce implementation has been a game-changer for Healthcare Holding Schweiz AG. It has enabled us to unify our operations and improve customer engagement across all entities. By adopting a phased approach, we were able to address the unique challenges of each business unit without disrupting our day-to-day activities.” – Fabio Fagagnini, CEO of Healthcare Holding Schweiz AG.
Challenge 1: Selecting the Right Tool
The first and most significant decision is selecting the right CRM tool. While Salesforce is a leader in the market, we needed to ensure that it was the best fit for Healthcare Holding’s specific needs.
- Understand Business Requirements: Each entity within Healthcare Holding had distinct requirements. We carried out a thorough assessment of each entity’s needs to ensure Salesforce would meet these diverse demands.
- Balancing Cost and Functionality: As Salesforce can be an expensive solution, we carefully weighed the costs of licensing and implementation against the projected benefits. In particular, we focused on maximizing cost efficiency while ensuring scalability.
- Alignment with Long-Term Goals: Salesforce needed to support the long-term growth of Healthcare Holding. We ensured that it could scale alongside the company’s expansion, making it a future-proof solution.
Challenge 2: Choosing the Right Implementation Partner
Finding the right Salesforce implementation partner was critical for ensuring a smooth process.
- Get Recommendations: Given the size of the market, we leveraged our network to find recommendations for partners that had experience in the healthcare and SME space.
- Experience with SMEs: We prioritized selecting a partner experienced in working with SMEs. They needed to be pragmatic, choosing functionality that fit our budget and operational needs. Several partners suggested costly enterprise-level solutions that were unnecessary for our purposes.
Challenge 3: Conduct a Successful Project Kick-off
The kick-off phase of the Salesforce implementation required careful planning to ensure smooth execution across Healthcare Holding’s entities.
- Define Roles and Responsibilities: We defined clear roles for both our internal team and the implementation partner, avoiding any ambiguity about who was responsible for key tasks.
- Create a Clear Roadmap: We developed a detailed roadmap with deadlines and ensured that everyone involved, from Sales to Customer Support, was aware of their responsibilities and timelines.
- Resource Allocation and Team Setup: We formed a dedicated project team early on, ensuring that all relevant stakeholders, including IT, Sales, and Service, were engaged from the start.
Challenge 4: Handling Multiple ERP Systems
Integrating Salesforce with Healthcare Holding’s existing ERP systems was one of the more complex challenges we faced.
- Assess Existing ERP Systems: We evaluated the current systems landscape to identify any integration challenges, aligning closely with our IT partner to ensure seamless integration.
- Select a Middleware: We selected a middleware layer that could handle the complexities of multiple ERP systems across our different entities, ensuring scalability and efficiency.
Challenge 5: Addressing Insecurity and Worries Among the Sales Force
Any major system change can cause concerns among employees, and Salesforce implementation was no exception. The sales force needed to be assured that the new system would support their work.
- Communicate Changes Early: We involved sales reps early in the process, allowing them to contribute to the project and gain confidence in the system’s potential.
- Demonstrate Capabilities of Salesforce: We showcased how Salesforce could increase productivity and enable the team to generate more sales, addressing their concerns.
- Avoid False Promises: Transparency was key. We avoided promising anything that might change during the rollout, ensuring clear and consistent communication.
Other Common Pitfalls in the Kick-Off Phase and How We Avoided Them
Several other potential pitfalls were carefully avoided during the Salesforce kick-off phase.
- Underestimating Complexity: Salesforce implementations are complex, especially when dealing with integrations and data migration. We adopted a phased approach, starting with core functionalities before gradually expanding the system’s scope.
- Inadequate Training and Support: User adoption is key to the success of any CRM. We invested in comprehensive training programs, including hands-on sessions and ongoing support, to ensure high adoption rates among our teams.
Preparing for the Next Phases
As Healthcare Holding continues to grow, we are preparing for the next phases of the Salesforce rollout, applying lessons learned from the kick-off phase to improve efficiency.
- Monitoring and Evaluation: We established a robust monitoring system to track the progress of the Salesforce implementation, ensuring any issues are addressed early.
- Planning for Rollout Across Entities: Each entity within Healthcare Holding has unique needs, so we tailored our approach while maintaining consistency across the organization.
- Consistency and Standardization: By balancing customization with standardization, we ensured that Healthcare Holding maintained a unified system that could support future growth.
“At Winterberg, we believe that leveraging technology to drive efficiency and scalability is critical for the success of our portfolio companies. The Salesforce implementation at Healthcare Holding has enabled us to build a robust foundation for future growth, while also improving customer interactions across all entities. Our phased approach ensured that we could address challenges early on, leading to a smoother, more successful rollout.” – Fabian Kroeher, Managing Partner at Winterberg Group AG.
In conclusion, implementing Salesforce within an SME, particularly in a multi-entity organization like Healthcare Holding Schweiz AG, requires a well-planned and executed kick-off phase. By carefully navigating key challenges such as tool selection, partner choice, and addressing team concerns, SMEs can ensure a successful rollout. As Winterberg Group continues to drive growth across its portfolio, we encourage other SMEs to invest in the critical early stages of their Salesforce journey for long-term success.
In the private equity world, competition is fierce, but the satisfaction of successfully executing a deal makes the grind worth it. We scour the market, build relationships, assess value and structure fair deals to drive growth for companies with high potential therefore creating value for our investors, the society and the economy. As PE players, we thrive in the complexities of sourcing, negotiating and closing deals that often require a delicate balance of strategic insight and operational know-how.
But lately, there’s been a looming threat on the horizon: Management Buy-Outs (MBOs). MBOs are not a new phenomenon in the M&A world, but their increasing prevalence in small-cap deals has become a particular challenge for players like us. What stings us the most is when we do all the heavy lifting — only to see the company handed over to its management team at the very last steps of the transaction process.
As small-cap PE investors, we understand the importance of aligning incentives with management teams. However, the rise of MBOs is starting to feel like an unfair game, one where PE players are being left out in the cold after having paved the way for success. In this article, we’ll explore why this trend is so concerning and how it threatens not only the hard work we put into deals but also the future of small-cap private equity.
Understanding the Dynamics of Management Buy-Ins
A Management Buyout (MBO) occurs when a company’s existing management team purchases the business, often with the help of external financing. In an MBO, the managers become the new owners of the company, and this can be an attractive option for both the company’s management and the current owner.
From the perspective of the current owners, an MBO often provides a smooth transition, as the managers are already familiar with the business and can ensure operational continuity. For the management team, an MBO offers them the chance to take control of the company they know intimately and potentially benefit from its future growth.
However, from the perspective of a PE firm, MBOs can represent a huge loss — particularly when they come late in the deal process. After all, it is the PE firm that often does the heavy lifting, from identifying value in the company, negotiating with stakeholders and creating strategic growth plans. To be cut out at the last minute by the management team stepping in with an offer can feel like a betrayal after months of work.
The Private Equity Journey: From Identification to Deal Execution
The path to a successful deal in small-cap PE is rarely straightforward. It begins with finding the right company — often an underappreciated or undercapitalized business that has untapped potential. We spend countless hours analyzing the market, reviewing financials, understanding the industry and identifying opportunities for operational improvement or strategic growth.
Next, we approach the company, build relationships with the key stakeholders and position ourselves as value-added partners. This often involves more than just showing up with a checkbook; we demonstrate how we can contribute strategic insight, operational expertise and the capital required to scale the business.
The due diligence process is another major investment of time and resources. We assemble teams of experts to assess the company’s financial health, uncover hidden risks and validate growth assumptions. This phase involves detailed legal work, financial modeling and long, intense negotiations.
At the culmination of all this hard work, we structure a deal that benefits everyone involved — only to find, at the last minute, that the management team has secured financing from elsewhere and has arranged an MBO. Suddenly, everything we’ve built—the trust, the relationships, the investment of resources — vanishes.
The Growing Prevalence of MBOs in Small-Cap PE
Why are MBOs becoming such a common issue for small-cap PE players? There are several contributing factors:
Access to Capital: Managers today have unprecedented access to financing options, particularly from non-traditional sources like family offices, private debt funds and mezzanine lenders. These sources often offer favorable terms, making it easier for management teams to pursue buyouts without relying on external PE firms.
Owner Preferences: For business owners, selling to management often represents the path of least resistance. Management teams already know the business inside out, reducing the perceived risks associated with transition. Owners may feel more comfortable selling to familiar faces rather than bringing in an outside PE firm, which may implement significant changes to operations, strategy, or leadership.
Manager Ambitions: For managers, the prospect of owning the business they run is highly attractive. With an MBO, they can take control of their own destiny, enjoying both the autonomy of ownership and the financial upside that comes with it.
Trust and Relationship: Management teams often have long-standing relationships with the business owner. This gives them an inside track and allows them to negotiate directly with the owner while PE firms are still navigating the formalities of structuring deals.
Strategic Motivations: Some management teams view MBOs as a way to ensure stability. They may feel that bringing in outside investors, such as PE firms, could disrupt the company’s culture, introduce new pressures or lead to changes in leadership. By organizing an MBO, they can maintain control while keeping the business on its current course.
The Frustrations of Being Sidelined
For a small-cap PE firm, being cut out by an MBO after months of hard work is frustrating on many levels. First, there’s the financial loss. We invest significant resources — both time and money — into sourcing and structuring deals. Whether it’s engaging consultants for due diligence, assembling legal teams for negotiations or spending months building relationships with key stakeholders, the costs add up quickly. When an MBO occurs at the last minute, all of this becomes a sunk cost.
But the financial loss is only part of the frustration. There’s also the emotional toll. Deal-making is not just about money; it’s about relationships, strategy and the satisfaction of seeing a vision come to life. To be sidelined after months of hard work can feel like a betrayal—especially when the management team uses the value we’ve helped uncover to execute their own buyout.
What Can Small-Cap PE Players Do to Protect Themselves?
While the rise of MBOs is a challenge, it is not insurmountable. There are several strategies that small-cap PE players can implement to protect themselves from being sidelined:
Early Engagement with Management: Building strong relationships with the management team from the outset is crucial. By aligning their interests with ours early on, we can position ourselves as partners rather than competitors. This can reduce the likelihood of management pursuing an MBO behind our backs.
Incentivizing Management: Offering management a stake in the business as part of the deal structure can help align interests and prevent them from pursuing an MBO. If management feels they have a meaningful role and stake in the business’s success, they’re less likely to go rogue with a buyout.
MBO Protection Clauses: Including clauses in the initial stages of deal negotiations that give us protection against MBOs can be a safeguard. This ensures that if an MBO is on the table, we can get our costs reimbursed.
Demonstrating Our Value Beyond Capital: PE firms need to continue showcasing the value they bring beyond financial resources. Whether it’s operational expertise, industry knowledge, or access to broader networks, we must emphasize that our involvement can accelerate the company’s growth in ways an MBO may not.
Better Due Diligence on Management Intentions: During the early phases of negotiations, it’s important to assess the likelihood of an MBO attempt. Understanding management’s ambitions and potential access to financing can help us foresee and address the risk early in the process.
Management buyouts are increasingly becoming a thorn in the side of small-cap private equity players. While MBOs provide attractive benefits for management and business owners, they represent a significant challenge for PE firms that invest so much time and effort into structuring deals, only to be cut out at the last minute.
“Our firm position on this, is that we do not start due diligence, if we do not feel protected enough. Doing multiple due diligences without having MBO protections would make every small cap PE bankrupt these days. In other words, we don’t gamble the DD costs anymore to find out in two months that the company is sold to its managers. We had painful experiences in the last few years and decided to put an end to that.” – says Fabian Kroeher, Managing Partner at Winterberg Group
As PE players, we must stay vigilant and proactive in addressing the threat of MBOs. By building stronger relationships with management, offering creative deal structures and showcasing the unique value we bring, we can mitigate the risk of being sidelined. After all, in the world of small-cap private equity, adaptability is key — and it’s often the difference between a deal closing in our favor or slipping through our fingers.
Healthcare Holding Schweiz AG, a Prominent Swiss Medtech Services and Distribution Group Managed by Winterberg Advisory and KKA Partners, Expands its Portfolio with the Acquisition of Naropa Reha AG.
St. Gallen, Switzerland – July 2024
Healthcare Holding Schweiz AG (“Healthcare Holding”) has successfully completed the acquisition of Naropa Reha AG (“Naropa”), thereby gaining an access to a well-established portfolio of rehabilitation and care products, a foothold in the Swiss healthcare market, and a reputable brand known for improving the quality of life for individuals with disabilities.
“We are pleased to bring Naropa Reha AG into our portfolio,” stated Fabian Kroeher, President of the Board of Healthcare Holding Schweiz and Partner at Winterberg Advisory. “This acquisition aligns with our strategic goals, and we look forward to a productive collaboration. Naropa’s expertise in rehabilitation and care products will be a valuable addition as we continue to expand our presence in the healthcare market.”
“I am delighted to see Naropa Reha AG in such capable hands,” said Herbert Dietsche, the previous owner of Naropa. “I am confident that under Healthcare Holding Schweiz’s stewardship, our commitment to service with competence and heart, improving the lives of those we serve will continue uninterrupted. I look forward to seeing Naropa thrive and grow in this new chapter.”
With this acquisition, Healthcare Holding Schweiz further strengthens its status as market leader in Medtech services and distribution in Switzerland. Already boasting a diverse and robust portfolio of companies, Healthcare Holding Schweiz continues to demonstrate its strategic acumen and commitment to excellence, paving the way for sustained growth and innovation in the Swiss healthcare sector.
About Naropa Reha AG
Naropa Reha AG is a company based in Staad, St. Gallen, Switzerland, specializing in supplying products and services in rehabilitation and care as well as being a specialist in fitting and maintaining active wheelchairs, enhancing the lives and care of individuals with disabilities. Naropa Reha AG supports both private individuals and institutions with their comprehensive range products, maintenance and services.
About Healthcare Holding Schweiz AG
As a leading player in the Swiss Medtech services and distribution sector, Healthcare Holding Schweiz AG based in Baar, Switzerland is focused on growing its portfolio through strategic acquisitions and partnerships. It is committed to innovation and customer satisfaction, aspiring to redefine industry standards with state-of-the-art solutions and exceptional service. To date, the group has acquired Senectovia Medizinaltechnik AG based in Urdorf, Winther Medical AG based in Baar, Mikrona Group AG based in Schlieren with its business units Mikrona and Ortho Walker, and MCM Medsys AG based in Solothurn.
About KKA Partners
Founded in 2018, KKA Partners is a Berlin-based lower mid-market private equity firm that invests in leading companies in Germany, Austria and Switzerland – the so-called “Mittelstand”. The Founding Partners all have a deep-rooted family and professional heritage in the Mittelstand developed over 20 years in working closely with Mittelstand companies. KKA is at the forefront of the next wave of value creation through Technology Enabled Transformation of the Mittelstand.
About Winterberg Advisory GmbH and Winterberg Group AG
Based in Gruenwald, Germany, Winterberg Advisory GmbH manages Private Equity investment funds, mainly concentrating on Small and Midcap Buy and Build platforms such as Healthcare Holding Schweiz AG. Winterberg Group AG, located in Zug, Switzerland, is an independent family office that invests in Small and Midcap Private Equity, along with selective ventures in real estate and other asset classes.
For media inquiries, please contact presse@healthcare-holding.ch.
Note to Editors: Please credit Winterberg Group for all references to provided quotes and information.
For further information about Naropa Reha AG visit www.naropa-reha.ch.
For further information Healthcare Holding Schweiz AG, please visit www.healthcare-holding.ch.
For Healthcare Holding’s portfolio companies visit www.senectovia.ch, www.winthermedical.ch, www.mikrona.ch, www.orthowalker.ch and www.mcm-medsys.ch
For more information about KKA Partners visit www.kkapartners.com and about Winterberg www.winterberg.group.
This press release is prepared and distributed by Winterberg Advisory GmbH on behalf of Healthcare Holding Schweiz AG.
Why is Switzerland considered an investment haven in 2024? To answer this question, we can observe how the country’s economic growth has compared against the other top 9 European countries by gross domestic product (GDP) in Graph 1 and 2.
While Switzerland was the seventh-largest economy in Europe by GDP, according to the most recent data available in 2023, it also experienced the third-largest compound annual growth rate (CAGR) in its yearly nominal GDP from 2017 to 2023.
This growth is impressive, but to further understand the key drivers behind it, we can compare which of Switzerland’s various sectors and industries were the most important contributors to economic growth by the total value of their output.
Graph 3 above displays the average of the total gross value added (GVA) contributed by each economic sector over the period. For a broad overview, it is evident that the Swiss economy was largely driven by the tertiary services sector, which on average contributed more than two-thirds of Switzerland’s total GVA per year.
Zooming further into the tertiary sector in Graph 4, the most significant industries in terms of average contribution to Switzerland’s total GVA per year over the same timeframe have been Government Services, Wholesale, Real Estate, Financial Services, and Healthcare, respectively.
Since our interest primarily lies in commercial industries, and with Wholesale being the most significant in terms of yearly contribution to total economic growth within the tertiary sector, further examination into Switzerland’s foreign trade environment is needed to understand what factors drive this industry.
In Graph 5, it is visible how Switzerland in recent years has been a net exporter, with imports trailing closely, representing only a marginally lower share of total foreign trade flows per year in CHF on average. If we segment Switzerland’s total exports and imports by product groups, as in Graph 6, then next after chemical and pharmaceutical products, the second most widely traded commercial products were Machines, appliances, and electronics.
From an investor’s perspective, one might assume that operating costs would be significantly higher for companies engaging in the production or sale of commercial goods with operations headquartered domestically in Switzerland rather than elsewhere. This is especially evident when comparing Switzerland’s annual wages to the other top 9 European countries by GDP, as seen in Graph 7 below. Switzerland’s average annual wages have been the highest among these countries in recent years, increasing at the second fastest CAGR of approximately 0.5% over the same period.
From this data, we can infer that exporting consumer goods to Swiss customers while having operations headquartered abroad could yield greater operating margins due to lower costs, such as full-time employee (FTE) salaries, and higher prices on product sales. This would be more advantageous than having operations headquartered domestically in Switzerland, which would result in significantly higher staff costs, especially for manufacturers with substantial infrastructure and FTEs.
However, the exception would be distributor companies, which need less infrastructure to conduct operations. For them, the most important factor is having all their customers based in Switzerland and selling their products at higher prices, not necessarily their operations. Although, ideally, they should be headquartered abroad too.
These insights on foreign trade and average annual wages in Switzerland outline an essential part of our investment rationale: our current focus on consolidating Swiss distributors of medical equipment and devices, as well as medical service providers, into our Buy & Build platform, Healthcare Holding Schweiz AG.
The Swiss medical services sector, which earlier in Graph 4 was the 5th most significant industry in terms of average contribution to Switzerland’s total GVA per year, is of equal interest to us for integration into our Buy & Build platform in the foreseeable future. Specifically, our focus remains on the testing and inspection of medical equipment.
“We are excited about the positive direction of the Swiss economy and look forward to realizing operational synergies from our current holdings,“ explained Fabian Kroeher, Partner and Co-Founder of Winterberg Group. “Expanding into the medical services industry with testing and inspection certification will broaden our range of offerings and enable product cross-sells, enhancing our overall value proposition.”
Alternatively, a current setback in the Swiss economy is the difficulty local businesses in all sectors and of all sizes face in successfully recruiting staff with higher professional education.
From the graph above, it is visible how within the tertiary sector, most difficulties related to recruiting staff with higher professional education were in the healthcare and social services industry—approximately 28% of full-time employees in that industry were found with difficulty per quarter on average.
An interesting offering by many medical equipment distributors based in Switzerland, including those we integrated into our Buy & Build platform, is that they provide complementary training to their customers’ staff on the usage and best practices for the equipment they sell. We plan to capitalize on this opportunity by capturing the professional training services market, specializing in the usage of medical equipment, to cross-sell more products and services offered by our holdings and realize further synergies.
In summary, Switzerland’s strong economic growth, largely fuelled by the tertiary sector, highlights its appeal as an investment haven. By integrating Swiss medical distributors and service providers into our platform, we enhance efficiency and capitalize on operational synergies. Additionally, integrating professional training services will solidify the position of Healthcare Holding Schweiz AG as a market leader in the Swiss medical industry.
In an era where quality assurance and risk management have become pivotal to every industry, the significance of testing, inspection and certification (TIC) services has never been more pronounced. As we navigate through the complexities of global markets, the TIC sector is witnessing a transformative phase – a comprehensive roll-up.
What is TIC
The Testing, Inspection and Certification Market is a dynamic and rapidly evolving sector that plays a crucial role in ensuring product safety, quality and compliance with regulations across various industries. Overall, the products and services should meet regulatory and industry standards to protect consumers and the environment. This market encompasses a wide range of services, from testing and inspection to certification, which are essential in mitigating risks, improving efficiency and facilitating smooth market access.
Roll-ups / Buy &Build in TIC in Europe
The TIC sector in Europe has seen a significant M&A activity from both private equity and trade consolidators over the last five years. The strengthening regulatory landscape across various sectors, along with specific growth drivers within individual sub-sectors, has underpinned the ongoing attractiveness of TIC sector for investors. Buy-and-build strategies have played an important role in driving the growth of TIC, as incumbent players seek to leverage the benefits of scale to address a broad range of sub-sectors and unlock further synergies.
In the TIC market, Europe has been the dominant M&A geography, with 48% of the targets acquired in the last decade located here. Following cases illustrate the strong interest of PE firms in the TIC sector in Europe, driven by high levels of recurring revenues.
In 2021, CAG Groep, a TIC company, was acquired by SOCOTEC Group from Gate Invest. In the same year, Warburg Pincus, a global private equity firm, acquired a significant stake in NSF International, a leading global public health and safety organisation. NSF International provides testing, inspection and certification services in various sectors, including food, water, health sciences and consumer products. As another example, Oakley Capital, in recent years, has been active in the TIC sector, acquiring various businesses to build a strong portfolio in the industry. One example is their investment in Schülerhilfe, a tutoring service that also provides certification services for educational programs.
Unconsolidated Swiss Market
The Swiss market is one of the few in Europe that remains relatively unconsolidated. Switzerland is home to a significant number of small and medium-sized enterprises (SMEs) that provide specialised TIC services. These companies focus on niche markets or specific industries, offering tailored solutions that larger firms might not provide. The high prevalence of these SMEs leads to market fragmentation and less consolidation. “TIC appears to be an attractive fragmented market in Switzerland which we have been carefully following for quite some time now. We aim to launch a Buy & Build platform in that space and are currently developing a pipeline of investment opportunities.” – adds Fabian Kroeher.
Additionally, Switzerland’s regulatory framework is complex and varies across different cantons. This decentralisation can create barriers for large TIC firms attempting to establish a consolidated market across the country. Whereas smaller, local firms often have the advantage of better understanding and navigating these regional regulations, maintaining their market share and contributing to the unconsolidated market.
Switzerland’s economic stability and strong sectors, such as pharmaceuticals, finance and manufacturing, provide a robust environment for TIC companies. Many of these sectors demand highly specialised TIC services, which local firms are well-positioned to provide, reducing the impetus for consolidation. Other factors contributing to the Swiss TIC market being unconsolidated are cultural and language diversity, strong local expertise and customer preference for local providers.
Swiss Market Overview
The Swiss market, particularly in the context of the TIC industry, features a unique and dynamic landscape of SMEs operating independently. Its fragmentation is reflected in the fact that, as of 2021, there were 723 companies in the Swiss TIC market, which is valued at CHF 2.7 billion and has been growing at a rate of approximately 4% annually. In addition, the Swiss TIC market is characterised by high standards of quality and innovation. Despite challenges such as high operational costs and regulatory complexity, the market presents significant opportunities for growth driven by technological advancements, sustainability trends and the robust demand from high-value industries.
In summary, the TIC market, particularly in Europe, is a dynamic and evolving sector. The trend of roll-ups and buy & builds is shaping the industry, offering opportunities for growth and consolidation. The Swiss market, while currently unconsolidated, presents potential for future development in the TIC sector. With the same approach, Fabian Kroeher concludes: “In the world of quality and safety, the Testing, Inspection, and Certification market roll-up is the natural way of market evolution.”
In the vibrant DACH region’s healthcare sector, private equity investors are increasingly deploying roll-up strategies to consolidate fragmented industries and enhance value. This method involves acquiring multiple smaller companies in the same industry and merging them into a single entity to capitalize on synergies and economies of scale. This approach is particularly relevant in healthcare, where the fragmentation of service providers like dental clinics, radiology centers and general practitioners offers ample opportunities for consolidation.
Insights from Winterberg Group
Winterberg Group, a multi-family office investment firm and a trailblazer for SMEs in healthcare, has identified this strategy as one of the best practices for investors. Fabian Kroeher, Partner and Co-Founder of Winterberg Group, emphasizes the potential benefits, stating, “The opportunity to streamline operations and centralize administrative functions offers tremendous value creation potential in the fragmented healthcare sector.”
PE Investors and Their Activities in the DACH Region
The landscape of healthcare roll-ups in the DACH region is populated by a variety of PE investors, each focusing on different sub-sectors within healthcare.
Key Players in Dental Sector Consolidation. Notable among them is Castik Capital Partners based in Munich, which has made significant strides with its investment in All Dent, a German operator of dental centers. Similarly, Investcorp, a global player from Bahrain, has taken significant steps with Acura, a network of approximately 100 dental practices led by former practice owners and business professionals.
Expanding European Influence and Specialized Investments. Further north, Nordic Capital out of Stockholm focuses on a broader European strategy but includes significant activity in DACH through the European Dental Group, a conglomerate of dental practices spread across six countries, including Germany. On a more specialized front, HTGF Founders Fund in Bonn supports PraxisEins, a German network aimed at addressing the looming general practitioner care shortages.
Investments in Specialized Healthcare Networks. Another significant player is Nord Holding, which invested in ZG Zentrum Gesundheit, a network of ophthalmologists and eye surgery centers primarily within Germany. Meanwhile, Telemos Capital from London has expanded its healthcare footprint with Sanoptis, a network of 400 ophthalmologic clinics across Europe, and with Stingray, an alliance focusing on cancer therapy practices in France and Germany.
Strategic Insights and Execution
Successfully rolling up healthcare entities in the DACH region requires a diligent strategy that hinges on several key practices. Kroeher underscores, “Standardizing operations and implementing best practices across all acquisitions is crucial. This not only reduces costs but also enhances patient outcomes significantly.”
Centralization and Bargaining Power. Centralization of administrative functions also plays a critical role. “By consolidating tasks such as HR, payroll, and compliance under one roof, we not only reduce redundancy but also enhance our negotiating power with vendors and suppliers,” Kroeher adds. Consequently, this enables negotiating better terms with vendors and suppliers. This strategic centralization optimizes back-office operations of healthcare practices.
Leveraging Healthcare IT Systems. In the digital age, embracing robust healthcare IT systems is non-negotiable. Kroeher notes, “A best-in-class practice management system lays the groundwork for seamlessly integrating smaller practices.”
Diligent work by heart. Lastly, conducting proper due diligence is indispensable. . Investors must perform thorough financial and tax due diligence to verify historical financial results and identify any potential liabilities before sealing the deal. This level of scrutiny ensures that the roll-up strategy is built on a solid foundation, mitigating risks and setting the stage for sustainable growth.
Avoiding Common Pitfalls
While the potential benefits of roll-up strategies in healthcare are significant, certain pitfalls must be avoided to ensure the success of such ventures.
Underestimating data policies. One of the most common mistakes is underestimating the importance of data policies. Failure to adequately back up data or secure sensitive patient information can lead to substantial fines and severe legal problems, highlighting the necessity of robust data management practices.
Regulatory Compliance. Moreover, compliance with regulatory standards cannot be overlooked. The healthcare sector is heavily regulated, and each acquisition must be thoroughly evaluated for its compliance posture. Neglecting this aspect can expose the roll-up to potential fines and legal challenges.
Overlooking billing practices. Additionally, investors must be cautious not to overlook the billing practices of target acquisitions. If a target practice employs more aggressive billing tactics than the acquiring system, this can lead to discrepancies in revenue projections post-acquisition. It’s crucial to align these practices to avoid unexpected shortfalls in revenue and adjust the purchase price accordingly.
Integration challenges. Managing the integration of multiple practices at the same time, appears as a further noteworthy challenge. “Ensuring a smooth transition requires well-structured planning and consideration of the cultural fit among the practices,” Kroeher advises. “Misjudging the compatibility of those practice cultures and systems can impede integration efforts.”
Conclusion
By and large, successful healthcare roll-ups depend on thorough standardization and centralization of operations, leveraging bargaining power and ensuring robust compliance with regulatory standards. Investors must avoid pitfalls such as underestimating integration challenges, overlooking billing practices and neglecting the cultural fit of acquired entities. Each acquisition should not only enhance operational efficiency, but also align with a broader strategic vision aimed at increasing the entity’s overall value and market presence.
Kroeher concludes, “With strategic foresight and careful execution, healthcare roll-ups can significantly increase value and operational efficiency, positioning these entities for greater success in a competitive market.”
In the dynamic landscape of digital threats, ransomware stands as a formidable challenge for modern organisations. Drawing from the firsthand experiences of Winterberg Group’s portfolio companies and insights from Executive Director Fabian Kroeher, this guide unfolds a strategic approach to ransomware incidents, illustrating the nuances of managing such crises effectively.
The Initial Strike: Isolate to Protect
The tale begins when a portfolio company detected an anomaly – an unusually slow network performance that was quickly identified as a ransomware attack. Following Winterberg Group’s protocol, the company acted swiftly. “The immediate disconnection of infected systems from our network was crucial,” recalls Kröher. This decisive action prevented the ransomware from spreading to interconnected systems, significantly containing the damage.
Comprehensive Assessment: The Heart of Response
After containment, the focus shifted to understanding the breadth and depth of the intrusion. The company deployed forensic tools to identify the ransomware strain, which turned out to be a variant known for encrypting data and exfiltrating sensitive information. “Documenting every detail of the attack was instrumental in shaping our recovery strategy and will assist in fortifying our defenses,” notes Kroeher. They meticulously recorded the ransomware type, the systems affected and any ransom notes left by the attackers. This thorough documentation aided in assessing the operational downtime and potential reputational damage.
Communication: A Key Pillar of Crisis Management
With a clear understanding of the attack’s impact, the company then communicated the breach. Internal notifications were issued to the IT team, management and the legal department, while external notifications followed, targeting affected clients and regulatory bodies. “We ensured compliance with data protection regulations by informing all stakeholders promptly,” Kroeher explains. This transparent approach helped maintain trust and provided a structured pathway for external support from law enforcement agencies.
The Dilemma: To Pay or Not to Pay
One of the most critical decisions was whether to engage with the attackers. “We considered the ransom demands carefully, weighing them against the potential long-term damages and the integrity of our data restoration capabilities,” Kroeher recounts. The decision was made to maintain a line of communication with the attackers while exploring all technical options for system restoration without succumbing to their demands.
Eradication and Recovery: A Path to Normalcy
Following a decision not to pay the ransom, the company focused on eradicating the ransomware. Infected devices were quarantined and subjected to a rigorous cleaning process using advanced anti-malware solutions. “Restoring our systems from backups was a pivotal step in resuming operations,” says Fabian Kroeher. They ensured these backups were uncompromised before using them to restore the affected systems fully.
Learning from the Incident: Forensics and Fortification
Post-crisis, a detailed forensic analysis revealed how the ransomware had penetrated their systems through a phishing email. This insight led to a significant overhaul of their cybersecurity protocols. “We patched the exploited vulnerabilities and enhanced our email security measures,” Kroeher details. These improvements were part of a broader initiative to boost their defenses, including regular security training for employees to recognise such threats.
Continuous Vigilance: The New Normal
In the aftermath, Winterberg Group implemented continuous monitoring tools to detect and respond to anomalies in real-time. Regular security audits became routine, ensuring that all systems adhered to the latest security standards. “Ongoing vigilance is crucial. We must stay as prepared and responsive as possible,” Kroeher asserts, emphasizing the importance of readiness in the face of evolving cyber threats.
Through this narrative, the steps taken by Winterberg Group’s portfolio company exemplify a robust and effective approach to managing ransomware attacks. Each phase of the response, enriched by Fabian Kroeher’s insights, highlights the importance of preparation, decisive action and continuous improvement, forming a blueprint for organizations navigating the turbulent waters of cybersecurity threats.
Healthcare Holding Schweiz AG, a Prominent Swiss Medtech Services and Distribution Group Managed by Winterberg Advisory and KKA Partners, Expands its Portfolio with the Acquisition of MCM Medsys AG.
Baar, Switzerland – April 2024
Healthcare Holding Schweiz AG has successfully completed the acquisition of MCM MedsysAG (“MCM”), thereby expanding its product range. This acquisition enriches Healthcare Holding’s offerings with a diverse product portfolio of approximately 900 products across various medical fields, including interventional therapy, surgery, nephrology, and oncology.
“With the acquisition of MCM, we are expanding our Healthcare Holding Schweiz product portfolio to include new classes of medical products (Class IIa/b and Class III) and establishing a presence in Canton Solothurn. This marks our first major acquisition outside the Zurich area. We look forward to collaborating with MCM’s management team to further develop the business and leverage synergies within the Group,” stated Fabian Kroeher, President of the Board of Healthcare Holding and Partner at Winterberg.
“I am delighted that the succession has been successfully executed, and I am excited to continue as a Board Member to support the old and new CEO David Egger in this new chapter of MCM Medsys. It is not just a significant milestone for the company but also a fantastic opportunity to enhance our contributions to the Swiss healthcare sector under the expanded capabilities and resources of the Group,” stated Louis Weidmann, the previous owner and President of the Board of MCM Medsys.
Healthcare Holding aims at becoming the undisputed market leader in Medtech Services and Distribution in Switzerland by professionalizing the industry and supplying Swiss patients with the world’s most innovative and high-quality medical products and services. The holding is currently at the forefront of ongoing acquisition processes and expects to successfully conclude further acquisitions shortly.
About MCM MedsysAG
Established in 1987 and headquartered in Solothurn, Switzerland, MCM Medsys AG is a value-added distributor of medical supplies and devices. It specializes in products for interventional therapy, surgery, nephrology, and oncology, offering a catalogue of over 900 items. With a supplier base of more than 20 exclusive partners, MCM supplies over 250 active clients, primarily including public hospitals, private clinics, and specialized medical practices. MCM distinguishes itself as a knowledgeable distributor with an innovative product portfolio, strong supplier collaboration, and dedicated customer support.
About Healthcare Holding Schweiz AG
As a leading player in the Swiss Medtech services and distribution sector, Healthcare Holding Schweiz AG based in Baar, Switzerland is focused on growing its portfolio through strategic acquisitions and partnerships. It is committed to innovation and customer satisfaction, aspiring to redefine industry standards with state-of-the-art solutions and exceptional service. To date, the group has acquired Senectovia Medizinaltechnik AG based in Urdorf, Winther Medical AG based in Baar and Mikrona Group AG from Schlieren with its business units Mikrona and Ortho Walker, as well as MCM Medsys AG based in Solothurn.
About KKA Partners
Founded in 2018, KKA Partners is a Berlin-based lower mid-market private equity firm that invests in leading companies in Germany, Austria and Switzerland – the so-called “Mittelstand”. The Founding Partners all have a deep-rooted family and professional heritage in the Mittelstand developed over 20 years in working closely with Mittelstand companies. KKA is at the forefront of the next wave of value creation through Technology Enabled Transformation of the Mittelstand.
About Winterberg Advisory GmbH and Winterberg Group AG
Based in Gruenwald, Germany, Winterberg Advisory GmbH manages Private Equity investment funds, mainly concentrating on Small and Midcap Buy and Build platforms. Winterberg Group AG, located in Zug, Switzerland, is an independent family office that invests in Small and Midcap Private Equity, along with selective ventures in real estate and other asset classes.
For media inquiries, please contact presse@healthcare-holding.ch
Note to Editors: Please credit Winterberg Group for all references to provided quotes and information.
For further information about MCM Medsys AG visit https://mcm-medsys.ch/.
For further information Healthcare Holding Schweiz AG, please visit www.healthcare-holding.ch.
For Healthcare Holding’s portfolio companies visit www.senectovia.ch, www.winthermedical.ch, www.mikrona.ch and www.orthowalker.ch.
For more information about KKA Partners visit www.kkapartners.com and about Winterberg www.winterberg.group.
This press release is prepared and distributed by Winterberg Advisory GmbH on behalf of Healthcare Holding Schweiz AG.
