The deal would make the investment banking firm one of the biggest global players in the fertility space.
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BY: RON SHINKMAN
Months of speculation as to which company would have the resources to purchase the massive fertility network the Eugin Group has narrowed down to a single candidate: Investment banking giant KKR. The deal could help it become one of the biggest global players in the fertility sector.
The Spanish media outlet CincoDías reported this week that KKR has entered into exclusive negotiations with Eugin’s parent company, Fresenius Helios, to make the purchase for an estimated $525 million. The investment banking firm Lazard is also involved in the transaction, according to CincoDías. Lazard helped Fresenius in consummating a $551 million biopharmaceutical acquisition last year.
KKR has been making significant inroads into the fertility space in the past couple of years. It acquired IVIRMA for about $3.2 billion earlier this year. It performed nearly 80,000 IVF cycles in 2021, primarily in Europe, but it also has clinics in the U.S. and Latin America. KKR also acquired the smaller GeneraLife Group last year, which performed some 25,000 cycles in 2021. It operates 30 clinics in Spain, Italy, the Czech Republic, Sweden and Portugal.
A KKR spokesperson declined to comment. Spokespersons for Fresenius and Lazard did not immediately respond to requests seeking comment.
Eugin operates 69 clinics in 11 countries on three continents, performing 45,000 cycles a year. And it is a big player in North America, owning and operating the Boston IVF network and TRIO, one of the biggest fertility practices in Canada. It also has a significant footprint in Latin America, with clinics in Colombia and Brazil. In Europe it has a large presence in Spain, along with clinics in Italy, Latvia and Sweden.
Although Fresenius has only owned Eugin since late 2020, it is not a core business for the company, which is a leading dialysis provider in the U.S. and operates more than 80 hospitals in Europe. It has been under pressure to divest Eugin after Elliott Investment Management acquired a large stake in the company about a year ago and its management expressed dissatisfaction with Fresenius’ financial performance. The company’s stock has risen by about 33% since Elliott purchased the stake, although shares dropped about 7% since the news of a potential sale to KKR was made public.
Robert Goodman, vice president in charge of healthcare for New York City-based MidCap Advisors, said a sale to KKR makes sense.
“It is a very large, very savvy firm that has made some big inroads into healthcare, and they are clearly a company with the capacity to do this,” Goodman said. He added that if KKR were to close the deal, it would likely use all its recent acquisitions to become the predominant player in the fertility space.
“They will have a big footprint to get it started, and if they have their eyes on that prize, they have the capability,” Goodman said. “There’s no question about that.”
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