Hospital Mogul Weathers Covid Chaos to $8 Billion Fortune
(Bloomberg) -- Jorge Moll Filho, a cardiologist who built a network of more than 50 hospitals and labs in Brazil, is set to emerge as a big winner in an industry turned upside down by a global pandemic.
Moll’s fortune will exceed $8 billion as the health-care empire he created, Rede D’Or Sao Luiz SA, successfully pulls off one of Brazil’s largest initial public offerings, according to the Bloomberg Billionaires Index. Shares of the firm priced at 57.92 reais each, according to people with knowledge of the offering.
The calculations exclude other Moll family members. Together, the family owns about half the firm. Moll’s fortune was previously estimated at $2.7 billion.
A Rede D’Or spokesperson declined to comment on Moll’s net worth and the IPO pricing.
Like most health-care billionaires, Moll saw his businesses pushed to the limit with the Covid-19 outbreak. Brazil was particularly hard hit by the virus, recording more than 6.6 million cases and the second-most number of deaths globally.
Rede D’Or hospitals treated more than 230,000 Covid-19 cases through September while dealing with a surge of cancellations in elective procedures. The number of overall patients seen during that period dropped 14% from a year earlier to 1.3 million. Net income fell 83% in the period.
Still, investors lined up for the IPO, with a recovery in the firm’s third-quarter revenues fueling optimism. Rede D’Or said in the prospectus it “quickly adjusted its fixed-costs structure” to face the pandemic fallout, claiming it will help improve performance down the road.
“Rede D’Or has done a phenomenal job consolidating the market for medical services in Brazil, having the aging of the population as a leverage ahead,” said Fernando Fontoura, a portfolio manager at Sao Paulo-based Persevera Asset Management. “The Moll family has been in the health business for a long time and is really committed to it.”
Born in Rio de Janeiro, Jorge Moll, 74, was a pioneer in realizing the lack of high-end hospitals in his home nation offered a profitable business opportunity. Brazil boasts one of the largest public health-care systems in the world, but it’s plagued with endless lines, bureaucracy and outdated equipment. Those who can afford it frequently turn to private hospitals for care.
Moll started a network of health diagnostics imaging laboratories in 1977 and then in the late 1990s began betting on high-end health-care facilities. One of his first ventures was to purchase the Copa D’Or, a posh hotel in Rio’s Copacabana neighborhood, and remake it into a hospital. Moll has said his goal was to mimic the success of Minnesota’s Mayo Clinic.
Drawing big-name backers including private equity firm Carlyle Group Inc. and Singapore’s sovereign-wealth fund GIC, his bet paid off. Rede D’Or now has the biggest network of independent, private hospitals in Brazil, according to the company, with 51 facilities and another 32 projects under development. It estimates that 22% of all active doctors in Brazil have some relation to Rede D’Or.
Moll is wagering there’s room for more. The five biggest independent hospital operators in Brazil account for less than 3.5% of total operational beds, according to the prospectus. Only 47 million people, or 22% of the population, have access to private health-care plans, according to data from the national health agency.
The company’s initial offering, raised at least 8.4 billion reais ($1.6 billion), according to people familiar with the matter, valuing the firm at about 115 billion reais.
The Moll family, Carlyle and GIC could also sell a piece of their stake if demand is high, filings show, though no decision has yet been made, the people said. Bank of America Corp. is leading the transaction. The firm plans on using the proceeds for more acquisitions, a key part of its strategy in past years.
At least one early backer will miss out on most of the bonanza: billionaire banker Andre Esteves. His Banco BTG Pactual SA, which once owned almost a quarter of Rede D’Or Sao Luiz, was forced to sell the asset in 2015 when it faced a liquidity crisis sparked by Esteves’ arrest on corruption charges. He was later acquitted of all charges.
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