Private Clinics in St. Petersburg: Wave of Acquisitions and Deals

The upcoming year may bring significant consolidation of players in the private healthcare market of St. Petersburg. Consolidation will occur both through the absorption of small clinics by large networks and as a result of deals between federal operators.

The segment of paid medical services in the city is highly fragmented. According to data, out of 430 licensed companies with annual revenue exceeding 10 million rubles (approximately $111,000 at current rates), 370 operate at a profit. Their total turnover reached 37.8 billion rubles (about $420 million), net profit was 5.3 billion rubles (about $59 million), while loss-making organizations lost 1.2 billion rubles (about $13 million).

Another about 170 firms have a medical license, but their annual revenue does not exceed 10 million rubles (approximately $111,000 at current rates). Despite modest scales, some of them show profits in millions of rubles. Separately, approximately 1,200 dental clinics of various sizes should be taken into account.

A vivid example of consolidation was the deal late last year. The European Medical Center (EMC) announced the merger of its business with the St. Petersburg network «Scandinavia», which is owned through LLC «Ava-Peter» by Alexey Mordashov«s »Severgroup«. In exchange for 100% of the shares of »Ava-Peter«, valued at 25.1 billion rubles (about $279 million at current rates), EMC will provide up to 26.7% in its managing company MKPAO »UMG«. Both brands will continue to exist.

The revenue of LLC «AVA-Peter» in 2024 was 6.7 billion rubles (about $74 million), net profit — 1.3 billion rubles (about $14 million). The company manages 23 «Scandinavia» clinics, including multidisciplinary centers and two hospitals. EMC itself, according to Vademecum, with revenue of 25.4 billion rubles (about $282 million), took third place among private multidisciplinary clinics in Russia, losing only to «Medsi» and «Mother and Child».

After the accession of «Scandinavia» and the previously joined «Family Doctor» group, the combined structure will have a total revenue of about 44.3 billion rubles (approximately $492 million at current rates). This will allow it to become the second player on the federal private healthcare market. As noted by Dmitry Tortev, a member of the expert council of the State Duma Committee on Competition Protection, EMC will strengthen its presence in the regions, gaining access to clinics in St. Petersburg, Vologda, and Kazan.

In addition to this major transaction, last year saw less large-scale acquisitions. For example, the clinic «Baltmed» bought a medical center in Manezhny Lane. Anna Mageryova, Deputy General Director for Development at «Baltmed», explained that buying an existing business was a faster solution compared to building a new clinic.

The federal network «Medsi», part of AFK «Sistema», is also exploring opportunities to purchase assets in St. Petersburg. According to sources, the company is in talks with a number of network clinics, but no final decisions have been made yet. In the city, «Medsi» already operates three clinics.

The St. Petersburg company EMS «Unified Medical Systems» has been discussing a possible deal with «Medsi» for two years. General Director of EMS Tatyana Romanyuk stated that there is no rush to sell, but partnership with a large company can ensure stability in conditions of uncertainty.

The head of the Association of Private Clinics of St. Petersburg, Alexander Solonin, believes that consolidation will primarily affect small clinics. «The process of small clinics exiting is ongoing because companies» costs are steadily rising, and demand for private medical services in real terms is growing weakly,« he says.

Indeed, small medical centers are actively offered for sale on the market. On platforms like «Avito» or «Altera Invest», dozens of listings can be found. For example:

• A multidisciplinary clinic on Bolshoy Prospekt V.O. with an area of over 600 sq. m is being sold for 18 million rubles (about $200,000 at current rates). With revenue of 13 million rubles (approximately $144,000) in 2024, its loss was 7 million rubles (about $78,000).
• A children«s medical center near Sennaya Square with an area of 170 sq. m is valued at 15 million rubles (about $167,000). Its annual revenue is 19 million rubles (approximately $211,000), but in 2024, the activity became loss-making by 1.5 million rubles (about $17,000). The reason for the sale is stated as the owner»s retirement.
• Also offered are a family clinic in the Primorsky District for 9.1 million rubles (about $101,000), a network of three clinics for 25 million rubles (approximately $278,000), and a large laboratory in a separate building for 70 million rubles (about $778,000).

Investment interest in private healthcare remains high. In addition to «Severgroup», such players as «Mother and Child», which bought the «Expert» network, «Medsi», opening new facilities, and «SM-Clinic», expanding its branch network, are investing in the industry. Sber is also building its own clinic in Moscow.

Managing partner of the company DMG Vladimir Geraskin notes that the market is attractive due to its insufficient consolidation and stable demand even in a crisis. «Now in the country, there are fewer and fewer sectors where EBITDA exceeds 25%, and against this background, the private healthcare segment looks quite attractive,» he explains. According to his data, EBITDA in the segment can reach 40%.

An additional incentive for investors could be the upcoming IPO of the company «Medscan». A successful placement could attract new players to the industry.

However, market participants point to serious risks. General Director of the holding «Adamant» Yevgeny Fyodorov lists: «This is a severe shortage of personnel, the rising cost of all services, and systemic instability.» In his opinion, the state does not strive for cooperation with private healthcare, which creates uncertainty.

According to the forecast of the Association of Private Clinics of St. Petersburg, in 2025, the volume of the paid medical services market in the city will grow by 12-15% and reach about 98 billion rubles (approximately $1.1 billion at current rates). Among the largest players in the local market are «Scandinavia», MIBS, «Medical Center »XXI Century«», GC «Medica», and GC «Euromed».