MEM

CORPORATE FINANCE ADVISORS

PROJECT MERLIN
ROMANIAN PRIVATE MEDICAL SERVICES PROVIDER

Disclaimer

Any information being shared in

this document that pertains to
the Company, the Sellers or the
Advisor has been documented
from various conversations with
the Seller's representatives.
Accuracy is not guaranteed nor
should the information be
considered complete. Due
diligence should be undertaken
to verify the accuracy of
information. No representations
or warranties are herein
expressed or implied.

The owners (hereinafter referred to as “the Sellers”) of Merlin Group

The (“Merlin”, or “the Company”) are currently exploring the possibility of divesting
Project: up to 100% equity interest in the Company (“the Project”);

Est. 2003, Merlin is currently one of the Top 10 Romanian private medical
services providers, offering in- and out-patient medical services, as well as
laboratory analysis and diagnostic imaging (“DI”) services;

Merlin is also one of the largest Romanian contractors to the domestic health
funds;

The Company has built a 40 bed specialised hospital in downtown Bucharest,
which will be commissioned in the coming weeks;

In the past years, Merlin has continuously improved its market presence and
position and enjoyed a healthy growth in turnover and EBITDA on one of the
most dynamic and attractive markets in Romania.

The  Merlin operates through a group of three companies, using a number of

Company: medical facilities in Bucharest and other major cities across Romania, including:
o 10 out-patient clinics, out of which 8 located in Bucharest; one of
the clinics in Bucharest provides also inpatient services, in 16 beds;
o 7 medical laboratories, of which 5 in Bucharest;
o 5 DI centers, all located in Bucharest;
o A 40 bed hospital in downtown Bucharest, specialising in urology
and urological surgery (to be commissioned soon).
 Most of the medical equipment is rent from a number of partner firms (“the
Partners”).
 The majority of locations used are rent, based on long term tennancy contracts.
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CORPORATE FINANCE ADVISORS

All of Merlin’s medical facilities are accredited by the Romanian Ministry

Activities of Health and the National Health Fund, and received some of the highest
and scorings in Romania for technical capabilities;
Structure of Merlin is ISO 15189/2007 and ISO 9001/2008 certified for all its units;
Revenues: The Company provides the full range of ambulatory services and
investigations to its patients, including laboratory analysis and diagnostic
imaging, surgery and daily hospitalization;
In 1H, 2013, Merlin had served almost 200,000 patients, compared to ca.
345,000 in total 2012;
The Company is providing regular medical services, via subscriptions, to
more than 3,500 corporate clients;

Merlin – Structure of Operational Revenues (1H, 2013)

Source: Company data for mid 2013

The Romanian private medical
Even if the market has somehow

Market, services market is estimated at ca.
Positioning €520M in 2013, increasing from ca.
and Upside €500M in 2012;
Potential:
In 2014, the Romanian Government
plans to allocate ca. 4.83% of GDP to
the healthcare sector (a slight increase
from ca. 4.61% in 2013), much lower
than the average percentage in Central
& Eastern Europe (ca. 6.8% of GDP)
or Western Europe (ca. 9.8%);

Romanian private healthcare sector
is among the most dynamic and
attractive ones in the European Union,
and so far has attracted significant
investment and interest from both
private equity practices and strategic
investors;

The largest medical services
companies (Medlife and Regina Maria,
followed by Medicover) are all
invested by private equity;
stagnated in 2013, industry specialists
estimate that the market is set to further
enjoy a steady growth, mainly due to
poor quality of medical services in the
state-owned medical facilities and
continuous growth and consolidation of
the large private players;

Merlin estimates ca. 2.5% market
share (on the relevant market) in
turnover (2011 data) and a 11%
spontaneous recognition (2012 data);

Given its solid business, brand
recognition and market presence,
Merlin can be used as a platform to
build a serious challenger to the two
market leaders (Medlife and Regina
Maria), mainly via natural growth
and/or aggressive consolidation
through bolt-on acquisitions.

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CORPORATE FINANCE ADVISORS

As per end 2012, Merlin had 446 employees, compared to 378 in end 2011;
Human In December 2012, the Company had a number of 123 medical doctors and
resources: 144 other medical staff on its payroll.

Financial
The company operates with excellent EBITDA margins;

highlights:
Merlin is currently undergoing an audit procedure with one of the “Big 4”;

The Company does not have any long term loans, except for the leasing
portion for the equipment;

Between 2011-2013, Merlin has invested over €15M, capital expenditure
being directed mainly to the hospital, DI equipment and rebranding. Most of such
capex program was invested using Company’s own cash;

The Company has opened a RON 3M (ca. EUR 675k) short term credit facility
with a local bank.

In early 2011, Merlin registered supplementary revenues from the various
Romanian health funds, covering services rendered in 2010.
€‘000 2011 2012 2013 (e)
Key
Financials Operational revenues 8,164 8,089 9,467
(Romanian Adjusted EBITDA (*) 3,352 2,592 3,032
accounting FX Rate (avg) 4.2379 4.4560 4.4200
standards, Leasing (**) 3,626 2,289 1,690
not audited) Short term loans 435 554 N/A
FX Rate (year end) 4.3197 4.4287 4.4500

(*) Adjusted EBITDA includes rental fees payed to Partners for the equipment rent
(**) Mainly equipment leased by Partners, see note below; Merlin does not have any other L/T
loans.
Other
information  King’s Place Advisors and its partners (jointly referred to as “the
Advisor”) act as exclusive sell-side advisors to the Sellers in the Project;
 The transaction will include the medical equipment, currently in the books
of the Partners, that is used by the Company;
 Depending on the transaction structure agreed with the preferred
investor(s), the hospital may not be part to the transaction;
 All communication or inquiries related to the present document or the
Project should be directed to the Advisor. The Sellers or the Company should not
be contacted without the prior written consent of the Advisor.
 Interested investors will receive an Information Memorandum upon
execution of an NDA. The Information Memorandum will be available in the
second half of January 2014.

Dragos Stanescu Marius Manoiu Gheorghe Ciobanu

Contacts: Director – Romania
King’s Place Advisors
Tel: +40 722 500 307
kpa_romania@yahoo.com
Managing Director, CEO,
MEM Corporate Finance Concept Consulting
Advisors Tel: +40 726 748 749
Tel. +40 745 314 029 gheorghe.ciobanu@con
marius.manoiu@ess.ro ceptconsulting.eu

Address: 1A, Alexandru Lahovary Square, Apt. 61, Bucharest 1, Romania

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