How Almaviva Santé doubled in size in a challenging French healthcare market

How Almaviva Santé doubled in size in a challenging French healthcare market

In just two years, Almaviva Santé more than doubled in size to become one of the largest private hospital groups in France. What lessons can we learn from a buy & build strategy that was executed in a highly regulated market where budgets are under pressure?

End December 2013 Gimv and French investment company UI Gestion acquired Almaviva Santé (, a small group of seven private clinics in the Provence-Alpes-Cote d’Azur (PACA) region in France. The investment rationale was framed as a ‘buy & build’ strategy, that is, to leverage the established strengths of the company and its new financial clout as a platform on which to acquire, integrate and develop synergistic companies in the market. Since then, Almaviva has grown both organically and through several acquisitions, becoming the undisputed market leader in the PACA region and a major player in the Paris region.

This growth story is materialising very fast but at the time we invested none of this was obvious. Hence the question: what lessons can we learn from a buy & build strategy that was executed in a complex and highly regulated market where budgets are under pressure and where strong competition is faced from both the public and the private sector?

A market under pressure needs consolidation

If you are looking for a smooth path to growth and profitability, the French healthcare market might not be your obvious first choice. Healthcare budgets have been under pressure for years and are unlikely to improve soon. In fact, in April this year the French government announced an unprecedented cut in healthcare spending for private clinics of 2.5%.

This hurts all providers but it is especially painful for some of the smaller private clinics that were already struggling to survive. Given its fragmented character and the recent budget pressure, the French private clinics market is seeking increased efficiencies and scale effects, at least in part through consolidation. While this makes the market a fertile ground for a buy and build strategy, consolidation amongst clinics is a challenging endeavour. Clinics are divers and complex organisations, where relatively autonomous doctors and local traditions hold sway. A heavy-handed acquisition strategy could end up alienating doctors and key (medical) staff from the necessary management structures in a growing group.

While a successful buy & build strategy in this type of market obviously needs to be driven by solid economic choices (seeking growth, scale and profitability), Almaviva chose to differentiate itself from other consolidators by recognising and nurturing the less tangible assets such as the reputations of clinics and doctors, and also the values and organisational culture of its local clinics. This is the key to the success of Almaviva Santé.

Almaviva Santé: from local champion to national competitor

Almaviva was founded by current CEO Bruno Marie in 2007 and gradually began acquiring private clinics in the PACA region. Towards the end of 2013, when Almaviva was a group of seven clinics, Gimv and French investment company UI Gestion acquired the company to help transform it into one of the leading private clinic groups in France by 2019. In 2014 Almaviva opened up a second region by acquiring a first clinic in Paris, followed mid-2015 by Clinique Arago, one of the top orthopaedic clinics in Paris. Also in 2015, Almaviva merged with Domus Cliniques, a group of 12 clinics and SSRs (Soins de suite et de réadaptation) located in the PACA and Paris regions. Today, Almaviva is a group of 22 private clinics that manages more than 2,000 beds, employs almost 3,000 medical staff members and achieves a turnover of more than €200 million. Already, the group is the sixth largest private hospital group in France. 

Broadly speaking, Almaviva has done two things really well that explain its success so far.

1. High quality care combined with an efficient delivery model

In a market where providers are forced to do more with less, profitability is bound to come under pressure. Many of the smaller undifferentiated private clinics in France are struggling to keep their heads above water. Almaviva, however, has managed to maintain its profitability through economically grounded investment decisions:

Firstly, Almaviva has invested, both organically and through acquisitions, in medical specialisations such as ophthalmology, orthopaedics and maternity. From an operational perspective these are comparatively easy to plan and standardise. Manage these well, and it is possible to deliver a high quality of care, very efficiently.  

Secondly, Almaviva has a strong regional focus, building critical mass in two regions. Both regions are relatively affluent and densely populated, where demand for healthcare services is ‘healthy’. Furthermore, a regional focus allows the group to exploit operational synergies between new acquisitions and existing sites (e.g. use of machinery, purchasing), exchange best practices and share medical specialists across different clinics.

Finally, Almaviva has made a strong shift to ambulatory care and telemedicine. This is a more scalable and efficient healthcare delivery model, it pre-empts the state’s budgetary drive to reduce hospital stays, and it is better and more convenient for patients.

Bruno: "We moved early to ambulatory surgery which is now 70-90% of our operations, up from 50% five years ago. And we’re continuing to innovate in areas like telemedicine. For instance, we are piloting morphine pumps which can be controlled remotely by the anaesthetist."

2. Nurturing intangible assets to set in motion a virtuous circle of organic and acquired growth

The healthcare sector is governed by a complex interplay of stakeholders. In the case of private clinics, for example, it is policy makers not consumers who drive spending, and doctors are not employees but independent professionals who nevertheless determine a clinic’s reputation. Moreover, patients are gradually becoming better informed ‘consumers’ of healthcare services, where quality and reputation drives choice. Furthermore, the core assets of hospitals typically are its people, including nurses, doctors, but also its managers. For many of them, their work at the clinic is not a job, it is a calling, a commitment to a deeply treasured profession. In other words, the intangible assets of private hospitals are pretty fragile, they need to be managed with care. If managed badly, healthcare providers could incur the wrath of policy makers, doctors, staff and patients.

For Bruno Marie, the best way to do so is via a well-balanced management structure, where hospital directors can make independent and rapid decisions, and where the lines of communication and decision making are short. 

Bruno: “We are fast on our feet because there is almost no hierarchy. Decisions that cannot be taken at the clinic level are in the hands of a handful of people. So we’re flexible and can shift gear rapidly when necessary.”

This approach allows clinics to respond rapidly to local challenges and opportunities, such as recruiting top physicians, investing in the newest technologies and expanding into new specialisations. It takes account of the fact that each clinic is different, with different medical activities and a different local context. Furthermore, it is an approach that respects the independence of doctors. One of Bruno’s key objectives in this regard is to attract and retain top doctors and top medical teams, and in this way build the medical reputation of the company’s clinics.

Our reputation for medical excellence is a key value creator. To further bolster it we are investing in high end medical platforms to attract and retain the best doctors.

Bruno Marie - Président Almaviva Santé

Brand and reputation drive the company’s growth in multiple ways. They drive organic growth by attracting leading doctors and specialists, and by attracting patients. But they also drive external growth by opening up acquisition opportunities. For the historic owners (often doctors themselves) of private clinics up for sale, management style and brand do matter, perhaps equally so than price.

The right balance

To conclude, Almaviva has excelled in two domains; they have made good economic choices and they have taken good care of the group’s intangible assets. By focusing so heavily on the group’s reputation and management qualities, they have set in motion a virtuous circle of attracting and retaining doctors, attracting and retaining patients, and crucially for a good build & buy strategy, attracting and retaining acquisition targets. This seems to be the key lesson in a successful buy and build strategy.

Why we invested

Gimv: leveraging our buy & build experience

With Almaviva currently being the sixth largest private clinic group in France and the largest in the PACA region, this buy and build strategy is thus far turning out very well. As explained by Bart Diels, Head Health & Care Gimv, “In our healthcare team we look for investment opportunities in growth companies that bring innovative care concepts to the market. Almaviva fits the bill because they know how to deliver high-quality healthcare in an increasingly budget constrained environment. It also is a case where we can bring to bear the full weight of both our financial resources and experience in helping companies acquire, integrate and develop complimentary businesses.” 

With three acquisitions made in the last year, adding fifteen clinics to the group, the focus for the coming months will be on the integration process and building a cohesive management team that is well-equipped to lead an organisation that has more than doubled in size. This will set the stage for continued growth in the years ahead, as additional investment opportunities become available”, adds Christophe Van Vaeck, Principal in the Gimv Health & Care team.

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