Südamekodud sells care services business to Central European group, eyes set on Pärnu and Narva

Estonia's largest private care home chain, Südamekodud, is selling its entire care services business to Central European healthcare group Penta Hospitals International, though the real estate remains in the hands of Estonian owners. The company's board chair confirms there will be no changes to client or employee contracts or pricing. Future expansion plans target Latvia, Lithuania, and in Estonia, Pärnu and Narva.

Estonia's leading private care home company, Südamekodud, announced on Friday, 27 June 2026, that it is selling its entire care services business to Central European healthcare group Penta Hospitals International, based in Slovakia. The transaction includes business operations and the brand, but the real estate remains in the possession of the current Estonian owners. The transaction price is confidential.

Why the sale?

Martin Kukk, board chair of Südamekodud, explained to ERR that expansion into Latvia and Lithuania requires substantial capital investment, and therefore it was necessary to find a strategic partner to develop faster. Last autumn, negotiations took place with several potential partners in both Scandinavia and Central Europe, until the choice fell on Penta Hospitals.

"I believe that Latvia and Lithuania will catch up with Estonia and Scandinavia at some point, and therefore there would also be a need for large strong operators there to continue delivering quality service," said Kukk. He added that Estonia's care market is not unlimited, and Südamekodud's mission has been to establish new facilities in the right locations.

In Estonia, Südamekodud's next expansion targets Pärnu and Narva. However, nothing will change for clients and employees, employment contracts, client contracts and pricing will remain the same.

The legal side of the transaction

Sven Papp, advocate at Sorainen, assessed the transaction as a significant event in the Estonian context. He explained that selling a business separately from real estate is not unusual in any way, the same model applies to many hotels, for example, where the operations and brand belong to one company and the building to another.

"These sellers simply offered for sale not the real estate but the business operations and the brand. There is nothing extraordinary about this," Papp confirmed.

The state requires an operating licence

According to Sirlis Sõmer-Kull, policy head for care services at the Ministry of Social Affairs, it makes no difference to the state what the ownership structure of a care home is or where the service provider is registered, what matters is that all Estonian requirements are met and there is an operating licence from the Social Insurance Board. Penta Hospitals' application process is currently ongoing and it is not yet clear whether they will take over the existing operating licence or apply for a new one.

The need for care is growing in Estonia

Sõmer-Kull pointed out that the number of people needing care in Estonia is on an upward trend due to an ageing population. Following the 2023 care reform, nearly 2,000 new care home places have been created and the service has become more accessible. However, he emphasised that Estonia is an exceptional country, with more care home service users than home care and other in-home service users, which is a clear area for development.

The Ministry of Social Affairs is investing nearly 16 million euros in welfare technology, which offers screening and emergency call options via video link to delay the need for a care home place. "If we do these two things, I believe we can keep the need for care home places under control, because it is a very expensive service," explained Sõmer-Kull.

Who is Penta Hospitals?

Penta Hospitals International is one of Central Europe's leading healthcare and long-term care service providers. The group operates 53 hospitals, 62 outpatient clinics and 61 elderly care homes in Slovakia, the Czech Republic and Poland, and employs more than 22,000 people. In 2025, the group's revenue was 1.5 billion euros and over 530 million euros was invested in healthcare infrastructure.

Penta Investments has been associated with the so-called Gorilla corruption scandal in Slovakia that erupted in 2011-2012, in which transcripts of conversations emerged suggesting suspicious dealings between top businessmen, politicians and law enforcement. Penta has denied the allegations, and in 2012 Slovakia's Constitutional Court ruled that the secret surveillance was unlawful.