Florin Andronescu, 48, one of the high-profile Romanian entrepreneurs, has invested most of the money he got from selling his Credisson business into a private medical services company, as this particular market is posting outstanding growth and profit margins.
Andronescu was among the founders of the home appliance retail chain Flanco and later went on to develop Credisson, the consumer credit company, which he eventually sold to the French-owned company, Cetelem. The transaction spurred a series of acquisitions by strategic investors within the Romanian financial services industry.
Andronescu's investment strategy is now focused on private medical services, which are among the most profitable investment options. Investment funds have already entered this sector (Gemisa Investments, for instance, which chose to develop niche medical businesses), as well as large strategic investors such as General Electric and even financial institutions such as the World Bank.
"I invested 5 million euros in building the second Sanador clinic, near Piata Victoriei, and in buying state-of-the-art medical equipment, so this is a complete project. We expect the new medical unit to help our turnover triple, even if not right away. This business is on a highly promising market, with a 25-30% annual growth rate and an EBITDA accounting for 30-40% of turnover," Florin Andronescu told ZF.
He estimates the market of private medical services is currently worth 200-250 million euros and is concentrated in the capital city area, a trend that is also visible on other Central and Eastern European markets.
Sanador, established in 1999, is owned and managed by Carmen Doris Andronescu, wife of the founder of Flanco, the company that was taken over last year by Flamingo.
"Depending on the results we attain in 2007, we intend to float Sanador on the Bucharest Stock Exchange, to attract funding to build a private hospital. I think the investment needed for such a project revolves around 5 million euros," Andronescu added.
Last year, Sanador posted turnover worth about three million euros, with a gross profit margin revolving around 40%.
The first private hospital in Romania was opened in 2005, following a 10 million-euro investment made by financial group Eureko, which operates in Romania through Interamerican.
Moreover, medical services company MedLife has said it will invest 26 million dollars (some 21 million euros) in the next few years, in order to build clinics and hospitals in various Romanian cities. For this project, MedLife will receive 13 million dollars (10.5 million euros) from the International Finance Corporation (IFC), the investment arm of the World Bank.
Andronescu received 9.4 million euros from Cetelem for his 20% stake in Credisson. Last spring, Cetelem paid 47 million dollars for Credisson, which it bought from Swedish investment fund Oresa Ventures and Florin Andronescu. The contract signed with Cetelem enables Andronescu to retain his position as chairman of Credisson until May 2008.
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