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62 I Eastern Europe bne October 2021
who has goals in life and our job is to help them get there and stay healthy on the way,” says Yanovsky.
Russians have been through something of a revolution as they became more prosperous and that has changed the way the EMC works. The emphasis has gone
“Over the last 10 years the mentality has changed,” says Yanovsky. “And the pandemic has catalysed that. Health is seen as more valuable, something you have to invest into. Customers see the doctor not just as someone that treats you, but it's like a car which needs regular checks and maintenance.”
both cashed out and Shilov also took some money off the table, reducing his stake to 55%. In total a 45% stake was sold which is now the free float.
The deal netted the firm’s owners almost $500mn in proceeds. Abramovich’s Millhouse Capital offloaded its 6.9% stake, worth some $77mn, while Shilov scooped up $180mn in the deal and catapulted him into Russia's Billionaire club, according to Bloomberg.
“The key event in the first half of this year was the company's IPO on the Moscow Exchange. The listing was significant for the whole of Russia’s private healthcare market, as it was the sector’s first IPO for almost 10 years. We were happy that investors showed such a keen interest in the EMC's investment story, and that both internationally renowned institutional investors and a broad range of retail investors became shareholders.”
On August 30 the company released its first financial results following the IPO for the first six months of this year.
The company reported that adjusted revenues rose by 18.3% year on year to €134.3mn, driven by increases in both the number of visits and the average bill. The operating profit climbed by 63.7% y/y to €47.3mn on the back of higher revenues and ongoing selling, general & administrative expenses (SG&A) optimisation.
The Adjusted EBITDA increased by 52% y/y to €56.1mn. The adjusted EBITDA
“For me the patient is a client who has goals in life and our job is to help them get there and stay healthy on the way”
from treating illnesses to increasingly preventative and predictive medicine. For instance, during the coronavirus (COVID-19) lockdowns medical services necessarily became more distant, but one of the services the EMC offers is a smart box subscription that can perform some basic tests and measurements that links directly to the EMC over a wireless connection, and staff are available
24/7 to troubleshoot any questions or problems. Over the last year the EMC “tele-medicine treatments” grew by 3,000% and have affected what will probably be a permanent change to the relations between doctor and patient. The tele-medicine has also allowed EMC to reach outside its traditional catchment area of Moscow City and the surrounding region, but Yanovsky says the company still has no plans to expanding to other cities at this time, as Moscow and its Oblast remain the size of most Central European countries and is very far from being saturated.
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Over the next ten years the business continued to grow until 2018, when there was another change of ownership. After earning double-digit returns, Baring Vostok sold its entire stake to MedInvestGroup, who later sold its stake to Egor Kulkov, the owner of pharmaceutical chain Pharmstandard, and oligarch and Chelsea football club owner Roman Abramovich in 2020, who became minority shareholders. Shilov retained the remaining 71.2%.
The IPO was triggered by Baring Vostok's decision to sell. Shilov asked Kulkov if
he would like to buy the stake, with the promise either to buy it back later or organise an IPO. Abramovich came into the deal as a financial investor.
IPO and results
The EMC listed on the Moscow Exchange on June 16 with a $1bn valuation. No new investment capital was raised, as Kulkov and Abramovich