Liverpool Partners buys Australian fertility business

Adora Fertility is run out of four Healius day hospitals, three of which will be sold to Liverpool Partners as part of the transaction. Healius initially agreed to offload the business to Virtus Health, a larger fertility player, in October 2021 for AUD 45m. The Australian Competition & Consumer Commission sought to block the deal and Virtus subsequently pulled out.

Fertility services have become a focal point for private equity in Australia. BGH Capital and CapVest Partners were involved in a fierce battle over Virtus, with CapVest ultimately winning with an AUD 667m bid. BGH twice appealed to the Takeovers Panel – once successfully, once unsuccessfully – amid concerns that Virtus was violating its fiduciary duties by only entertaining the CapVest bid.

BGH also has a history with Healius, having acquired the company’s primary care business – comprising medical centres, GP practices, and dental clinics – for AUD 500m in 2020. This followed an attempt by Partners Group to buy Healius outright.

Malcolm Parmenter, CEO of Healius, said in a filing that the sale of Adora is “in line with Healius’ strategy to simplify and realign its portfolio, enabling management to focus on development and growth in our core businesses.”

Most of the company’s revenue comes from pathology and imaging services. As of June 2021, it had 95 pathology labs and 2,010 approved sample collection centres, 30 hospitals, 55 community centres, and 49 medical centres devoted to imaging, and 12 day hospitals.

Revenue came to AUD 1.9bn in the 2021 financial year, up from AUD 1.56bn in 2020. Over the same period, a net loss of AUD 70.5m became a net profit of AUD 43.7m. Pathology and imaging together accounted for AUD 1.85bn in revenue. Fertility was last included in the 2020 financial results. It generated AUD 18.7m in revenue and was responsible for negative EBTIDA of AUD 1.8m.

Liverpool Partners is a middle-market growth and buyout investor set up in 2012 that targets opportunities across Australia and New Zealand with a focus on social impact. It targets businesses seeking AUD 10-50m in equity, with revenue of AUD 10-200m and EBITDA of AUD 2-20m.

Recent acquisitions include Seven Miles Coffee Roasters, a branded coffee supplier to the local cafe segment, and Australian Beverage Corporation (ABC), a coffee equipment and services provider.

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• Topics
• Australasia
• Healthcare
• Buyouts
• Australia
• Liverpool Partners