BUSINESS DESCRIPTION

Frösunda is one of the leading Swedish providers of care for individuals with learning disabilities, severe physical disabilities or psychological / behavioural issues. It offers personal assistance, elderly care, schools and youth rehabilitation. Frösunda is driven by strong values and the goal of offering its customers the highest possible quality of life.

Headquartered in Solna, Sweden, Frösunda employs around 4,300 full-time equivalents and cares for approximately 3,000 people across Sweden.

WHY DID WE INVEST?

Frösunda has a reputation for being a very high quality operator in its markets and enjoys strong advocacy amongst customers and employees.

Sweden has one of the strongest economies in Europe and commits to providing high quality healthcare to its citizens. HgCapital is supporting Frösunda in continuing to focus on quality care combined with operational flexibility.

HOW DO WE INTEND TO CREATE VALUE?

HgCapital is working with management to maintain profitable growth against the background of political change. We are reviewing small potential add-ons in existing business areas.

WHAT HAS BEEN ACHIEVED?

In September 2014, the Individual and Family business in Norway was successfully divested, with the consideration used to pay down debt.

HOW IS IT PERFORMING?

Frösunda has seen revenue growth over the year but has underperformed at an EBITDA level in 2016. This was primarily caused by macro headwinds in the Swedish healthcare market, particularly within the Personal Assistance business. However, we have seen continued growth in the Individual and Family and Elderly Care segments.

Frösunda was originally written down in 2011 and saw a further £1 million write-down in the Company’s valuation of its stake over 2016. With the support of HgCapital, the management are working hard to grow back value.

HOW WILL WE CRYSTALLISE VALUE?

The role of privately-owned companies in welfare provision is a closely-monitored political topic in Sweden and the future continues to be uncertain. However, we would expect Frösunda to have multiple roads to exit, potentially through one of the large Swedish healthcare conglomerates, another financial buyer, or by coming to market via an IPO, given sentiment towards healthcare assets following the IPOs of Capio and Attendo.

Sector Location Date of Investment Residual cost £’000 Unrealised Value £’000
Healthcare Nordic Region June 2010 14,296
11,429