CapVest tops BGH's bid for Australia's Virtus Health
CapVest Partners, a UK-headquartered private equity firm that primarily invests in Europe and North America, has entered the race for Australian fertility care business Virtus Health with an AUD 650.1m (USD 469m) offer.
The target company’s board has agreed to a period of exclusive due diligence, based on a 100% acquisition through a scheme of arrangement priced at AUD 7.60 per share in cash, according to a filing. CapVest has also indicated a willingness to proceed with an alternative structure with a price of AUD 7.50 per share and a lower minimum acceptance threshold of 50.1%.
The primary CapVest proposal represents a 46% premium to the closing price on December 13, the day before BGH Capital put Virtus in play. The local buyout firm built up a 9.99% interest, with an agreement in place for 10% more, and offered AUD 7.10 per share. Shareholders could choose to exit in full or roll over a portion of their interest into the acquisition vehicle.
Virtus stock jumped 34.5% to AUD 7.01 on the announcement of BGH’s offer. It closed at AUD 7.20 on January 20, after CapVest entered the fray, up 7.3% for the day.
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 on to make two bolt-on acquisitions - Victoria-based Melbourne IVF and Queensland Fertility Group.
Quadrant invested a total of AUD 83.7m in the company and held a 43% stake on taking it public in 2013. The IPO was priced at AUD 5.68 per share and proceeds amounted to AUD 338.7m, with the private equity firm making a full exit.
On listing, Virtus operated 34 fertility clinics, 16 embryology laboratories, 17 andrology labs, six diagnostic labs and six hospitals nationwide, employing 80 fertility specialists. Now 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 AUD 324.6m, up from AUD 259m a year earlier. Over the same period, group EBITDA rose from AUD 46.2m to AUD 93.4m and net profit increased from AUD 42.6m to AUD 43.1m.
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