The global fertility services sector is seeing an emergence of serial acquirers and an increased pace of consolidation, according to Alantra, an investment banking and asset management firm.
Alantra data shows that by the end of Q3 2018 there were 53 acquisitions made in comparison with 47 in the same period last year. By deal type, there was a 40 per cent increase in M&A deals and a 42% increase in trade deals, by the end of the third quarter of 2018 compared with the same period in 2017. The remainder were attributed to private placement or cross border transactions.
Justin Crowther, a Partner in the UK advisory business of Alantra identifies the following market drivers that are driving acquisition activity in the fertility services sector:
- Growing demand for IVF services is being driven by the continuing decline in fertility rates, growing public awareness of and increased accessibility to treatment, and technological advancements which are improving success rates.
- The UK is a favourable fertility tourism hotspot due to its international healthcare reputation, well-regulated market and ability to implement the most advanced treatments.
- Several international private hospital groups and specialist fertility treatment providers have emerged as the leading consolidators as they look to take advantage of the fragmented provider landscape.
- Instituto Valenciano De Infertilidad (IVI) is particularly active, acquiring five operators in the last two years. The acquisition of UK-based Midland Fertility enhances IVI’s international capability and capacity by leveraging the latest research and developments in fertility care and treatment technologies.
- Valuation multiples remain strong as corporate and private equity-backed trade players look to deploy capital to capture incremental market share and scale platforms.
Key fertility services transactions over the last 12 months include: IVI’s acquisition of Reproductive Medicine Associates of Philadelphia, P.C; Virtus Health’s acquisition of Complete Fertility and FutureLife AS’s acquisition of Galway Fertility through its Irish vehicle Reprome.