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Merger and acquisition activity continued to consolidate fertility clinics in 2022 as companies providing reproductive assistance brokered deals that expanded their buyers’ geographic footprints and market share. Transaction totals have increased in recent years from more buyers.
“For fertility practice transactions, 2022 was a tale of two kinds”, explains Richard Groberg, a financial executive who advises business sellers and buyers in the fertility field. “Early 2022 saw significant interest from buyers at high multiples [of EBITDA]”.
Groberg went on to say that many practices’ IVF and patient volumes declined in later 2022 after peaking from what he sees as a post-Covid boom in 2021. “As a result, acquirers have become much more prudent/risk averse in terms of valuations, earn outs, claw back provisions, etc.”
Damian Dalla-Longa, a partner at New York City-based Albaron Partners, a lower middle-market investment firm focused on the healthcare sector, says he is very optimistic about his group’s investment position in the fertility industry. “In the U.S. and globally, patient demand for fertility services outstrips the supply of physicians and IVF facilities. This will continue to drive strong growth in the industry for years to come.”
Such demand, along with a better awareness of IVF (in-vitro fertilization) and related services, rising infertility rates, and the advancing age of first-time parents, is expected to boost the global market’s value 37.5 percent (reaching $36.25 billion) by 2028, according to Zion Market Research data.
That growth has spawned a bounty of M&A activity over the last seven years. At least 25 deals transpired in 2022, as PE firms, digital health providers, and reproductive assistance/fertility companies jockeyed for market share. Some of the transactions included:
North America
Kindbody’s purchase of Vios Fertility Institute (February), Phosphorus Labs (June), and Alternative Reproductive Resources (August). The Vios deal doubled Kindbody’s U.S. footprint at the time to 26 clinics and propelled the company to unicorn status at a $1.15 billion valuation. The Phosphorus Labs and Alternative Reproductive Resources additions, meanwhile, gave Kindbody in-house genetic testing and surrogacy capabilities, respectively.
The Fertility Partners’ Canadian and U.S. expansion via partnerships with Ottawa Fertility Centre (Ontario), Grace Fertility Centre (Vancouver), Illume Fertility (Norwalk, Conn.), and Kitchener Area Reproductive Medicine Associates (Ontario). The latter affiliation expanded The Fertility Partners’ presence to 13 IVF centers across 36 locations in Canada and the United States, including seven in Ontario.
Pinnacle Fertility’s eight-clinic spending spree. Joining the Pinnacle corporate family were ORM Fertility (four practice loations in Oregon and Washington), Advanced Fertility Care (two practice locations in the metro Phoenix area), California Fertility Partners (Los Angeles), Institute for Human Reproduction (Chicago), Dominion Fertility (greater Washington, D.C. area), Seattle Reproductive Medicine, Center for Reproductive Care (Chicago), and IVF1 (Naperville, Ill.). “Our two most recent additions, Seattle Reproductive Medicine (SRM) and IVF1, have expanded our geographical blueprint,” said Chief Operating Officer Beth Zoneraich. “With SRM, we vastly expanded our presence in the Pacific Northwest and the West Coast overall.”
CCRM’s pickup of The Institute for Reproductive Medicine & Science, a fertility treatment center with eight offices in New York and New Jersey, and RADfertility, a fertility center with offices in Newark, Wilmington, and Dover, Del. CCRM is backed by TA Associates and Unified Women’s Healthcare.
Innovation Fertility, headed by CEO, Dwight Ryan, is the result of Albaron Partners affiliates’ acquisition of SpringCreek Fertility in Ohio. Charlotte, N.C.-based wealth advisory firm New Republic Partners made a strategic investment in Innovation Fertility, which is owned by Albaron Partners. “When we look at opportunities in general, we look to invest in underserved markets with positive growth potential,” said Dalla-Longa.
Ivy Fertility was backed by InTandem Capital Partners to purchase Utah Fertility Center, Nevada Center for Reproductive Medicine, and Nevada Fertility Center.
Prelude Network, owned by Inception Fertility, made its second fertility clinic purchase in Canada with Alberta’s Regional Fertility Program. Inception Fertility’s financier, Lee Equity Partners, is in the process of seeking a buyer for the company, according to reports from Axios.
Ovation Fertility, which typically purchases the IVF lab rather than the clinic, announced its deals with the Fertility Center in Grand Rapids in May Northeastern Reproductive Medicine in August. WindRose sold its stake in Ovation to Morgan Stanley Capital Partners in 2019.
Oma Fertility’s acquisition of Syosset, N.Y.-headquartered New York Reproductive Wellness. Oma Fertility is a division of San Jose, Calif.-based Oma Robotics, which boasts Jazz Venture Partners, Mithril, and Root Ventures as investors.
Boston IVF’s purchase of Delaware Institute for Reproductive Medicine, a fertility treatment provider in Delaware and the Mid-Atlantic region. Boston IVF is owned by the Eugin Group which is owned by publicly traded, Fresenius Helios.
Global Premiere Fertility’s pickup of Laguna Hills, Calif.-based Reproductive Health & Wellness Center. Led by CEO Kolin Ozonian, Global Premiere closed an $11 million Series C funding round last June from Triangle Capital Corporation.
CARE Fertility, owned and financed by Nordic Capital, made their first entry into the United States when they purchased Reproductive Endocrinology Associates of Charlotte (REACH) at the end of 2022.
International
IVIRMA sold to KKR for €3 billion instead of listing an initial public offering.
Monash IVF Group Limited’s $9.4 million purchase of PIVET Medical Centre, a southwest Australian fertility services provider; and $3.9 million deal for ART Associates Queensland #2 Pty. Ltd. in Brisbane, Queensland.
FutureLife was backed by CVC Capital Partners and Hartenberg Holding in its acquisition of Institut Marques, one of Spain’s largest fertility clinics. Headquartered in Barcelona, Institut Marques operates three clinics in Spain and two in Italy.
Not announced in 2022
Fertility Specialists Network, supported by LongueVue Capital, acquired Boca Fertility on January 12, 2023.
The last announced acquisition from Sverica Capital’s First Fertility was Fertility Institute of New Orleans in December, 2021
No announcements on 2022 acquisitions were found from US Fertility, whose principal investor is Amulet Capital, in 2022.
Groberg says that fertility networks, also known as Management Service Organizations (MSO) may begin to merge or invest more in starting De Novo (new location or start-up) fertility practices this year.
With regard to acquisitions of fertility centers in 2023, Groberg anticipates another tale of two kinds.
“I expect that acquirers will continue with more prudent valuations and terms. Also, there seem to be fewer multi-physician practices available, which likely will reduce overall activity but might increase the multiples for the strong, multi-physician practices that are interested in selling”.
The themes reported in this publication are those of the news. They do not reflect the views of Inside Reproductive Health, nor of the Advertiser
Corrections and Additions, January 27, 2023:
Correction: US Fertility's acquisition of Center of Reproductive Medicine in the Houston area was announced in January 2022.
Addition: Inception Fertility reported to Inside Reproductive Health that Prelude's acquisition of Main Line Fertility in the Philadelphia area took place in 2022.
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