BGH makes $432m bid for Australia's Virtus Health
BGH Capital has submitted a take-private bid for Virtus Health, an Australia-based fertility care services provider, that values the business at approximately A$607.3 million ($432 million).
The private equity firm is offering to buy all outstanding shares for A$7.10 apiece in cash, according to a filing. This represents a 36.5% premium to the December 13 closing price. Shareholders can choose to exit in full or roll over a portion of their interest into the acquisition vehicle.
Virtus closed at A$7.01 on December 14, up 34.5% for the day. The stock was trading around A$6.85 as of midday on December 15.
BGH has already built up a 9.99% interest in the company and has entered into a total return swap with UBS representing a further 10% stake. The Virtus board has begun an assessment of the private equity firm’s proposal.
Virtus was formed in 2008 when Quadrant Private Equity completed a management buyout of New South Wales-based IVF Australia, the country's largest group of dedicated fertility specialists. It went to make two bolt-on acquisitions - Victoria-based Melbourne IVF and Queensland Fertility Group.
Quadrant invested a total of A$83.7 million in the company and held a 43% stake on taking it public in 2013. The IPO was priced at A$5.68 per share and proceeds amounted to A$338.7 million, with the private equity firm making a full exit.
At the time of the IPO, Virtus operated 34 fertility clinics, 16 embryology laboratories, 17 andrology labs, six diagnostic labs and six hospitals nationwide, employing 80 fertility specialists.
Today, it employs 128 fertility specialists across 44 clinics, seven day hospitals, and 64 embryology, andrology, and diagnostic labs. The company has a presence in five countries and completes nearly 24,000 fresh in vitro fertilization cycles every year.
Revenue for the 12 months ended June 2021 was A$324.6 million, up from A$259 million a year earlier. Over the same period, group EBITDA rose from A$46.2 million to A$93.4 million and net profit increased from A$42.6 million to A$43.1 million.
BGH was established in 2017 by Ben Gray, formerly Asia co-head of TPG Capital, Simon Harle, another TPG alumnus, and Robin Bishop, who was previously head of Australia and New Zealand at Macquarie Capital. The firm’s debut fund closed at A$2.6 billion in 2018.
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