What was the deal?
The sale of CREATE Fertility, a UK-based provider of ‘mild and natural’ IVF services, to US-Spanish group IVIRMA, the world’s biggest IVF provider. The deal was for an undisclosed amount and completed in July 2021.
CREATE was founded in 2008 by Professor Geeta Nargund, a renowned gynaecologist and IVF doctor. It started in Wimbledon, London, as a single clinic offering IVF, using fewer drugs and advanced ultrasound techniques to improve patient outcomes. The business grew steadily and in 2013 took on a minority investment from Livingbridge to help with the next stage of its development. More clinics were opened in London and around the UK, in Birmingham, Manchester and Bristol.
How were you introduced to the deal?
In 2019, Professor Nargund bought back Livingbridge’s stake and the business became independent again. The plan was to explore a potential exit to a new partner who could work alongside the business to take it to the next level – help further internationalise the business, expand it in the UK and launch new IVF services. Professor Nargund wanted a partner with whom there would be a meeting of minds in terms of R&D and clinical governance. EY kept in close contact and when Professor Nargund decided to explore a majority sale, we were invited to pitch.
What were the timescales?
We were given the mandate in late 2020 and it took around six months. We spent a lot of time identifying the key investment attractions of the business and potential buyers to approach, and putting together marketing and diligence materials.
We had to think carefully about the optimal timing for the sale. All UK IVF clinics were closed in March 2020, due to the national lockdown. They reopened in May. Many experienced an immediate burst of activity, including CREATE. That was positive, but uncertainty around how performance would continue into 2021 remained.
Who were the advisers?
We were lead financial adviser. PwC carried out some commercial vendor due diligence for CREATE. KPMG did vendor financial due diligence. Eversheds provided the legal advice. EY’s tax team provided tax advice to the vendors. IVIRMA used Arcano Partners for corporate finance advice, PwC for financial and LEK commercial due diligence. McDermott Will & Emery did the legal work for IVIRMA.
What were the challenges?
The business had a strong, unique brand and presence in the market, and there was a lot of interest from international buyers. It was important that we ‘pre-qualified‘ and engaged with those who shared the same ethos as CREATE and would uphold its values. We had to assess what they’d be like as counterparties in the transaction and their ability to complete.
It was a traditional auction. We had to demonstrate to buyers that the high levels of activity post lockdown were sustainable. Those buyers who performed detailed diligence got themselves comfortable with this. IVIRMA wanted to expand its presence in the UK, and in Northern Europe – CREATE has a clinic in Denmark.
There were great synergies, not just between the two businesses but between the two management teams. IVIRMA has recently been sold to KKR, so I suppose it will now look for world domination of the IVF market.
Sylvester Oppong is a partner and head of healthcare and life sciences corporate finance and M&A at EY. He joined the firm in September 2020, from Smith Square Partners, where he was partner and head of healthcare M&A. Prior to that, he worked for Goldman Sachs in the investment banking division, Hawkpoint and Deloitte, where he qualified as an ACA.
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