One of the most impressive aspects to the growth story of private hospital owner and operator Ramsay Health Care Limited (ASX: RHC) is the incredible success the company has had at growing via acquisition.
Few companies have been able to achieve such a solid track record of successfully integrating acquisitions on a global scale; Ramsay's success is a particular credit to the late founder of the group Mr Paul Ramsay.
Growth is set to continue for the company thanks to the recent purchase of a controlling interest in one of France's leading private hospital and health service groups, Generale de Sante (GDS).
Combining the revenues of GDS with Ramsay's previous operations in France will see revenues leap from less than €400 million to over €2 billion. This combination will make Ramsay's market share in France twice as large as the second placed operator with the group boasting 115 facilities, 13,000 beds and 20,000 employees.
Here are just some of the reasons why the GDS acquisition is set to be an important avenue of future growth for Ramsay…
- France is the world's fifth largest economy.
- By 2050 France is set to be the equal largest (with the UK) country in Europe by population with a forecast 73 million inhabitants.
- The French hospital market is currently a €79 billion industry. This is forecast to grow to €84 billion by 2017.
- Like many populations around the world, the French population is an aging demographic. Currently around 25% of the population is aged 60 years and over. This age bracket is set to increase to 30% of the population by 2030 which will provide a tailwind for Ramsay's operations.
Reason to buy
While Ramsay's listed peers such as Healthscope Ltd (ASX: HSO), Pulse Health Limited (ASX: PHG) and Primary Health Care Limited (ASX: PRY) are domestically focussed, Ramsay offers investors the benefit of a globally diversified portfolio of hospital assets. Not only does this diversity decrease the regulatory risk but it also provides upside from potential higher growth and consolidation opportunities in foreign markets.