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Goldman’s Merchant Banking Unit Leads Latest Investment in Brazil’s Oncoclínicas Added in 4/23/2018
Goldman Sachs Group Inc.’s merchant banking division led the latest capital investment in Oncoclínicas do Brasil Serviços Médicos SA, a Brazilian provider of cancer treatments.

Victoria Capital Partners, a private-equity firm focused on investments in South America and afellow backer of Oncoclínicas, also took part in the transaction, according to a news release.

Founded in 2010 and based in São Paulo, Oncoclínicas provides cancer treatments, including oncology, radiotherapy and hematology, in 11 Brazilian states, according to the release. The company operates 59 units, including clinics and partnerships with hospitals, and treats more than 35,000 cancer patients every year.

Oncoclínicas generated consolidated revenue of 594.8 million Brazilian reais for 2016 (about $182.7 million at the time), according to an audited financial-results report accounting firm PricewaterhouseCoopers issued last year.

With the investment, Goldman became the majority shareholder in Oncoclínicas, according to the release. The firm’s stake in the company increased to about 75% from 37%, according to public documents published by Brazil’s antitrust agency, known as Cade.

The latest investment will provide Oncoclínicas with the capital it needs to continue its expansion efforts, including opening more cancer centers and bolstering its pediatric capabilities, said a person familiar with the matter. The company also plans to make new investments in facilities related to radiotherapy, which is a particularly capital-intense area, the person added.

Victoria Capital, which has offices in Buenos Aires, São Paulo and Bogotá, Colombia, initially invested in Oncoclínicas in 2012. Goldman’s merchant banking division in 2015 acquired a roughly 33% stake in the company, according to Cade’s documents.

Victoria Capital will retain a minority stake in Oncoclínicas, according to the Cade documents.

Brazil’s expanding middle class and aging population have been attracting more private-equity investment to the nation’s health-care sector, which also got a lift from a 2015 law that relaxed restrictions to foreign capital. Private-equity firms can take advantage of the fragmented market to speed up the expansion of their portfolio companies in the space, consultants said.

Oncoclínicas, for example, had three clinics when Victoria Capital initially backed the company, said another person familiar with the matter.

The health-care and pharmacy sectors accounted for 38% of the total value of private-equity and venture-capital investments in Brazil in 2015, the highest share among all industries, according to the latest data compiled by accounting firm KPMG and the Brazilian Private Equity and Venture Capital Association. That percentage fell to 7% in 2016, when Brazil was hit by a recession, according to the trade group’s documents.

Goldman’s merchant banking division is the private-equity arm of the New York bank. The unit has nine offices in seven countries, including one in São Paulo.

Six professionals from the Brazil office of Victoria Capital left the firm to form Principia Capital Partners last year. Principia is seeking up to $400 million for its first fund, WSJ Pro Private Equity reported.

Source: The Wall Street Journal


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