The Rózsakert Medical Center has become a member of Central Eastern Europe’s fastest-growing private health care network.
Budapest, 30 January 2019, MedLife SA, Romania’s largest health care provider group, has purchased a 51% stake in RMC Property Kft., the operator of the Rózsakert Medical Center. This move means that the Rózsakert Medical Center has become a member of Central and Eastern Europe’s fastest-growing private health care network. The investment entails significant developments, nation-wide growth and the continued expansion of the service portfolio. What this means is that the biggest winners of the acquisition are the Rózsakert Medical Center’s current and future patients.
The Rózsakert Medical Center was founded in 2001 by obstetrician-gynaecologist Dr Gyula Csermely, who previously had served as the first director of the private hospital in Telki. He leased a surgery in the Rózsakert Shopping Centre, where he started out by treating his own patients before deciding that he wanted to establish the kind of private clinic where he could provide patients with modern, people-oriented care that was based on internationally accepted medical principles. To this end, he attracted Hungarian doctors repatriating after working in the United States to join him as partners, and together they built, over the course of 18 years, a 1000-square-metre outpatient clinic and surgical centre. Today, the centre employs one hundred doctors covering the entire range of outpatient care and a support staff of nearly equal size. The Rózsakert Medical Center treats 40,000 patients annually and grossed HUF 1.4 billion in turnover in 2017.
Since the beginning, the RMC has been synonymous with quality patient care. At the time of its foundation, the institution set the objective of establishing in Hungary a new type of health care provision: innovative and people-oriented medicine in which the doctor and the patient work together in the interest of the patient. This idea was quite novel in the early 2000s and brought about a major breakthrough in health care provision in Hungary. In the nearly two decades that have elapsed since then, as an enterprise building on its own success, the RMC has succeeded in becoming one of Hungary’s leading health care institutions. Its growth has been dynamic and consistent over the years, and it has managed to maintain the highest professional standards throughout. In addition to measuring itself through traffic and patient satisfaction, it also does so with an independent audit, and it was the first facility to win the designation “Qualified Private Health Care Provider”. All of this is thanks to the high level of medical expertise paired with the people-oriented approach, which aims to provide patients with health care that is not simply good, but the very best.
As Dr Gyula Csermely put it, “When, during the period after the regime change, I started to think about what I would like to do, I realized that I would not be able to apply the principles that I really wanted for my patients within the traditional framework. The path that I wanted to go down led to people-oriented care of an absolutely high standard. Nevertheless, I decided not to move abroad, as so many others did, but instead to create this at home in Hungary. I was very fortunate, in the early 2000s, to find partners who think the same way I do. Most of them were coming home to Hungary from the United States or Western Europe. So we all spoke the same language and created this institution of which we are so proud. RMC was never a business venture for us. It is our workplace, our intellectual laboratory, where our doctors can realise their professional dreams and where the entire staff works to support and facilitate the medical work, so that that the doctor can concentrate fully on caring for the patient. We have an exceptional staff working at RMC, where the aim of every single employee is to work according to the very highest standard and for us to treat the patients, all of this in a very good workplace environment.”
The Rózsakert Medical Center is operated by RMC Property Kft. So far, this company had been 100% owned by, along with obstetrician/gynaecologist and foetal ultrasound specialist Dr Gyula Csermely, physician Dr Eszter Bodnár, clinical geneticist Dr Tibor Elekes, paediatrician Dr Kinga Jókay, paediatrician Dr Orsolya Gudor, haematologist Dr Imre Bodó, otolaryngologist and audiologist Dr Andor Hirschberg and economist Vilmos Benkő. The doctors with ownership stakes are the RMC’s managing doctors, who assure the quality of the RMC’s care on an everyday basis with their own work and approaches.
Dr Gyula Csermely has said that they too have observed that there is an upswing in the health care market, with more and more acquisitions, which is extremely positive, as the development of the sector is in everyone’s interest. “Many investors have also contacted the RMC in order to purchase it. The owners, however, preferred not to engage in substantive negotiations with financial investors, as the entire RMC model is about something else altogether. The RMC’s owners steer in the institution on a professional basis in which the primary aim is practising medicine of the very highest standard, and not maximising profits.”
The MedLife group invited the owners of the Rózsakert Medical Center to see how the network operates in Romania, and there they saw a highly successful company in line with their own values. “I went to Romania together with Dr Eszter Bodnár, who was my partner as medical director during RMC’s first ten years and now manages the internal medicine section. We were honestly amazed by what we saw, and also immediately felt ourselves at home there, as we could see top medicine of an international standard being practised, on an enormous scale and in a manner that was extremely well organised. We returned home thinking, even if not about selling, that this was a group with which we would be happy to continue our story.”
This is how the series of negotiations started. After being concluded successfully, the parties signed the contract. Pursuant to the agreement, RMC Property Kft. gave a 51% ownership stake to MedLife SA, with the other 49% remaining with the previous owners. The strategic objective is expansion and intensive growth with further acquisitions. The director of the company group is Dr Gyula Csermely, which provides a personal guarantee that, in the course of its ongoing growth, the RMC will retain those core values on which it established the surgery in 2001, and will continue to nurture and develop them in the future.
Dr. Gyula Csermely emphasised: “The investment being carried out is not simply a transaction, but is also the incorporation of a well-capitalised strategic partner with an approach that is similar to ours. We will move forward down the same path as before, with the aim of building a highly successful network.”
In this sense, continuity is guaranteed not only by having 49% of the Rózsakert Medical Center remain in the hands of its Hungarian founders, but also by the fact that the strategic investors have built up the Medlife group with the same approach as they have. In the new ownership structure, the parties are working together to make private health care treatment of the highest standard available to as much of the population of Hungary as possible.
"It is the first move outside Romania of a Romanian company operating in the private medical sector and we are proud that MedLife, the leader of the medical services market in Romania, exceeds the borders and leads the Romanian capital further. Hungary has an interesting, growing private medical market. I think that through our know-how in respect of expansion, as well as the good relationship with the existing shareholders of the companies already integrated in the Group, we will be able to develop a solid long-term partnership. The medical team in Hungary is very valuable and we believe that together we will strengthen the MedLife system to provide high-quality medical services to patients both in Romania and Hungary. The investments allocated for this stage amount to 4-5 million euros, and in the next period we will look at other expansion opportunities. Europe suffers in terms cross-boarder businesses, until now very few companies have achieved this, especially in the complex medical field, with medical clinics, imaging, laboratories and hospitals under the same roof. We have the chance to provide an example, and to the extent we will succeed, Hungary and Romania can become pioneers of a regional company" said Mihai Marcu, CEO and Chairman of MedLife Group.
MedLife is Romania’s largest private health care provider and one of the largest in the Central and Eastern European region. Its Romanian network serves five million individual users, meaning that every fourth Romanian has visited a MedLife facility. Every day, altogether 14,000-16,000 patients visit their facilities, which include everything from smaller private surgeries to diagnostic laboratories, specialised hospitals and the entire health care provision spectrum. For MedLife, listed in the premium category on the stock exchange, it was the clinics providing high-quality service that brought about the breakthrough. Today, the group runs 20 major clinics in Romania, giving it the biggest infrastructure in the private health care market. Its purchase of a majority share of the Rózsakert Medical Center constitutes the company’s first step toward regional expansion.
The founder of MedLife and chairman of its board of directors is Mihai Marcu, who has been building the private health care service provider since 1996. Born in 1970, Mihai Marcu graduated from the University of Bucharest’s Faculty of Mathematics and Computer Science in 1995. Prior to establishing MedLife, he worked in management positions in the Romanian banking sector.
Mihai Marcu, the founder
Mihai Marcu is the chairman of the board of MedLife and is registered on the stock exchange as its CEO. The Marcu family founded Romania’s largest private health care service provider in 1996, and his brother Nicolae Marcu has also been a member of the board of directors since 2016. According to the figures in MedLife’s 2017 annual report, Mihai owned a 21% share of the company, his brother Nicolae owned 15%, with another 15% share owned by their mother, Mihaela Cristescu.
Born in 1970, Mihai Marcu graduated from the University of Bucharest’s Faculty of Mathematics and Computer Science in 1995. Prior to establishing MedLife, he worked in management positions in the Romanian banking sector, such as serving as vice president of RoBank (which has since been acquired by OTP).