IVF provider Virtus Health accepts $706m CapVest offer

LONDON-BASED private equity firm CapVest looks to have emerged as the winner in the heated battle for Australia’s biggest IVF provider, Virtus Health, after it pipped homegrown rival BGH Capital with a sweetened $8.25-pershare offer to get the deal over the acceptance line.

Virtus on Monday told shareholders it had entered into a binding, two-tier agreement with the British private equity firm following months of back-and-forth offers from the two suitors.

Virtus’s share price jumped more than 7 per cent to $8.25 on the news of the $706m offer.

CapVest will firstly look to acquire the ASX-listed company via a scheme of arrangement at $8.25 per share.

If that fails, it has made a simultaneous off-market takeover offer at $8.10 per share, with the requirement that 50.1 per cent of shareholders accept.

BGH holds close to 20 per cent of Virtus and has previously said it would vote against a takeover by CapVest.

It comes after the bidding war reached fever pitch last week when BGH lobbed a fresh $8.10 a share offer at Virtus after Thursday’s market close only for CapVest to come back with its superior price.

The scheme offer of $8.25 a share is a 58.3 per cent premium to the $5.21 share price Virtus was trading at before BGH’s first tilt at the IVF provider was made public in mid December. The alternative $8.10 a share takeover offer represents a 55.5 per cent premium.

Virtus managing director and chief executive Kate Munnings said the lengthy battle between the two rivals was testament to the IVF provider’s market leading position and its precision fertility strategy.

“It is also a strong endorsement of all Virtus staff and fertility specialists who continue to work extremely hard to help more people become parents,” she said.

“Support from CapVest will provide a strong foundation for Virtus and its fertility specialists to further develop their practices and accelerate the national and international growth of Virtus.”

The deal also got the tick of approval from the company’s fertility specialists, executive director Dr Lyndon Hale said.

“CapVest has received overwhelming support from our fertility specialists, who recognise the compelling prospects for Virtus presented by the binding CapVest proposal,” Dr Hale said.