$3.25B. World’s Largest Ever Fertility Clinic Acquisition Approved After Almost One Year

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BY: RON SHINKMAN

Private equity giant KKR & Co. has, after 11 months of waiting for approval, closed its purchase of an 80% stake in IVIRMA Global, the Spanish-based chain of IVF clinics that is among the largest in the world.

The acquisition of IVIRMA by KKR is the world’s largest ever among fertility clinics, according to deal flow monitoring by Dresner Partners, a middle-market investment bank not involved in this deal, said Mitchell Stern, managing director.

The Spanish newspaper Cinco Dias reported that IVIRMA had originally planned an initial public offering, at a valuation of just over €1 billion in 2018, before disagreements among shareholders ultimately led to an offer from KKR for more than three times that amount.

KKR first announced the deal to acquire the majority stake in IVIRMA for an estimated 3 billion Euros ($3.25 billion) in March 2022. However, the Spanish trade regulator CNMC (Comisión Nacional De Los Mercados Y La Competencia) only approved the deal on Dec. 21 and did not announce it until Jan. 18, suggesting KKR and CNMC were in protracted negotiations to reach an agreement.

Specifically, the CNMC voiced concerns about the overlap of IVIRMA’s operations with IVF provider GeneraLife, which KKR acquired last year. GeneraLife operates 16 sites in Spain, and dozens more in Italy, Sweden, the Czech Republic and other European countries.

IVI is one of the older fertility chains in Europe, having been founded in 1990 and offering services such as ICSI as early as the mid-1990s. Spain’s IVI merged with U.S. contemporary, RMA of New Jersey in 2017, creating IVIRMA Global, and caught the attention of large investors.

KKR agreed to two specific conditions imposed by CNMC to close the acquisition: Divest its current clinic holdings in the provinces of Seville, Murcia and Zaragoza. GeneraLife operates five sites in those regions under the Ginemed brand. 

KKR also agreed not to raise prices among the clinics it will operate in Madrid, as well as not engage in any agreements to provide fertility services in conjunction with its primary competitor in Spain’s largest city. That provision is in effect for three years. The competitor was not named by the CNMC, but the GeneraLife-owned Ginefiv has the highest number of Google reviews in the area. 

Lastly, KKR agreed to modify arrangements for distributing exclusive solutions it owns that are used to freeze eggs and embryos.

“The offered commitments are sufficient to remedy the risks generated by the transaction in the markets for the provision of reproductive medicine services,” CNMC said in a statement.

KKR topped at least six other firms, including Cinven and Amulet Capital, Nordic Cap. Bain Capital, Carlyle and CVC Capital Partners, in their bid to purchase IVIRMA. Amulet Capital owns US Fertility, Nordic Capital owns CARE Fertility, CVC owns FutureLife, and Bain is an investor in sperm testing co., Legacy. Carlyle acquired equity in pharmaceutical company, Thermamex in August 2022.

KKR went ahead with the deal despite the choices of Morgan Stanley, Credit Suisse AG, Bank of America and Deutsche Bank AG last summer to dump their loan obligations,. In April 2022, Bloomberg reported the four banks had battled private creditors to finance the deal. Less than six months later, Bloomberg reported that those same four banks sold their approximately $869 million in obligations to private credit firms at a loss.

KKR declined to comment to Inside Reproductive Health about their post acquisition plans. There is no mention of the deal closing on the KKR website, and no indication of management or boardroom changes on the IVIRMA website.

Currently, IVI operates a total of 75 sites in nine countries, including clinics and laboratories. That includes 33 in Spain, 20 in the United States and 13 in the United Kingdom, according to the company’s website.

“They are interested in expanding in the United States,” said Stern. Currently, the bulk of IVIRMA’s U.S. clinics are in New Jersey and California. It operates two sites each in Pennsylvania and single locations in Florida, Texas and Washington State.

Aside from Spain and the United Kingdom, IVIRMA operates just six clinics in Europe--in Portugal, Italy and Denmark, according to their website. It is unclear if KKR plans to further expand IVIRMA clinics into areas where it has GeneraLife properties.

A recent interview given to Bloomberg by Philipp Freise, a KKR partner and its co-head of European private equity, suggested that the company will be particularly aggressive in Europe, in reproductive services. “As a macro point, Europe has never been more attractive in our view,” he said. “Now’s the time.”

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


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