Rede D’Or São Luiz, the Largest Private Hospital Operator in Brazil, Announces Capital Raise with The Carlyle Group

Proceeds will be Used to Finance Rede D’Or’s Ongoing Expansion Plans

New York and São Paulo – Rede D’Or São Luiz (Rede D’Or), the largest private hospital operator in Brazil, has agreed to a primary equity investment from global alternative asset manager The Carlyle Group (NASDAQ:CG). Proceeds from the transaction will support Rede D’Or’s growth plans, including the construction of new hospitals, expansion of existing facilities, and the financing of new acquisitions. Rede D’Or will remain majority-owned by the founding Moll family, and BTG Pactual will continue to own a minority stake.

Brazil has an estimated deficit of 13,000 hospital beds, or 10% of the existing 133,000 beds base in the private sector. Moreover, from 2006 to 2014, the number of private healthcare beneficiaries grew from 37 million to 53 million, while the number of hospital beds was virtually unchanged. Local hospital players’ access to capital will positively impact their businesses and the sector in general, ultimately resulting in increased supply in the market, technological advances and higher quality to patients and end-users. In this context, Rede D’Or is well positioned for growth in partnership with healthcare insurers and health management operations, and to continuously improve its high standards of medical quality.

“Partnering with Carlyle represents another milestone for Rede D’Or, and is consistent with the company’s long-term growth strategy in Brazil’s hospital market, allowing us to accelerate our plans to bring additional high quality supply into the market, as well as expand our geographic footprint,” said Dr. Jorge Moll, Founder, controlling shareholder and Chairman of Rede D’Or.

Today, Rede D’Or has more than 4,500 beds in 27 owned and two managed hospitals, in addition to 30 oncology clinics, with a presence in Rio de Janeiro, Sao Paulo, Pernambuco and Brasilia DF. The company will significantly strengthen and expand its platform, with plans to investment approximately R$1,500 million in existing and new facilities in 2015 alone.

Stephen H. Wise, Managing Director and Co-Head of Carlyle’s Global Healthcare team, said “Rede D’Or is a world class company with a strong management team and shareholders with extraordinary vision. We are pleased to be a part of the company’s shareholder base and to contribute to its growth strategy. We worked with CEO Heráclito Gomes in the past when he was the CEO of Qualicorp, a former Carlyle portfolio company, and we strongly believe in his ability to drive growth at Rede D’Or.”

Juan Carlos Felix, Managing Director and Co-Head of the Carlyle South America Buyout team, added, “The entire management team guiding Rede D’Or today is truly best-in-class; combined with Rede D’Or’s existing platform and reputation for quality, the company is well positioned to execute on its goals.”

“Carlyle’s investment in Rede D’Or validates our investment thesis and the capital raise further consolidates Rede D’Or as the primary strategic platform in a highly attractive segment of the Brazilian economy”, say Carlos Fonseca and Marcelo Hallack, partners of BTG Pactual’s Merchant Banking Group.

Heráclito Gomes, CEO of Rede D’Or, said, “I am confident that we can build a strong equity story together with our management team, The Carlyle Group, the Moll Family and BTG Pactual. The company looks forward to executing on its growth plans in partnership with insurers and health management organizations."

Equity for the investment will come from Carlyle Partners VI and Carlyle’s South American buyout funds, including the newly closed 700 million-real Fundo Brasil de Internacionalizacão de Empresas FIP II (FBIE II), a local fund advised by Carlyle and Banco de Brasil.

Carlyle was advised by BofA Merrill Lynch and J.P. Morgan Securities LLC, together with Skadden, Arps, Slate, Meagher & Flom LLP and Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados as legal advisors. Rede D’Or was advised by Banco BTG Pactual and legal firms Barbosa Müssnich Aragão (BMA) and Kirkland & Ellis LLP. The transaction is expected to close in the second quarter.

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About Rede D’Or São Luiz
Founded in 1977 by the Moll family in Rio de Janeiro, Brazil, Rede D’Or is the largest independent hospital operator in Brazil, with a presence in Rio de Janeiro, Sao Paulo, Pernambuco and Brasilia DF. The Company currently has over 4,500 beds in 27 owned and two managed hospitals, in addition to 30 oncology clinics. On an annual basis, the Company has over 2.7 million emergency room visits, 170,000 surgeries and 270,000 inpatient treatments, serving an addressable market of 53 million people. Headquartered in Rio de Janeiro, Rede D’Or currently has over 33,000 employees and 85,000 affiliated doctors.

About BTG Pactual
BTG Pactual (BOVESPA: BBTG11) is an innovative global financial company that operates in the markets of Investment Banking, Wealth Management and Asset Management. It offers advisory services in mergers & acquisitions, wealth planning, loans and financing, as well as investment solutions and market analyses. Based in São Paulo and founded in 1983, the Bank has R$218.3bn in assets, 3,200 employees worldwide and offices in over 20 countries.

Web: www.btgpactual.com

Contacts

Fernando Casagrandi
+55 11 3165-9573
btgpactual@fsb.com.br

About The Carlyle Group
The Carlyle Group (NASDAQ: CG) is a global alternative asset manager with $194 billion of assets under management across 128 funds and 142 fund of funds vehicles as of December 31, 2014. Carlyle's purpose is to invest wisely and create value on behalf of its investors, many of whom are public pensions. Carlyle invests across four segments – Corporate Private Equity, Real Assets, Global Market Strategies and Investment Solutions – in Africa, Asia, Australia, Europe, the Middle East, North America and South America. Carlyle has expertise in various industries, including: aerospace, defense & government services, consumer & retail, energy, financial services, healthcare, industrial, real estate, technology & business services, telecommunications & media and transportation. The Carlyle Group employs more than 1,650 people in 40 offices across six continents.

Web: www.carlyle.com
Videos: http://www.carlyle.com/news-room/corporate-videos_new
Tweets: www.twitter.com/onecarlyle
Podcasts: www.carlyle.com/about-carlyle/market-commentary

Contacts
Elizabeth Gill
+1 202-729-5385
elizabeth.gill@carlyle.com

In Brazil:
Ricardo Bonatelli
+55 11 3169.9342
ricardo.bonatelli@mslgroup.com

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