Target Fund Size: $40 million Capital Raised to date: $8 million
Industry: Healthcare, Fertility Services
Focus: Provide equity capital to build a national IVF platform consisting of existing clinic acquisitions and new builds

Status Update

  • Received strong support from existing investors who have closed approximately $4 million. In addition, $4 million has been raised from new investors
  • Completed first investment in October 2020, a new clinic in the Southeast which opened in November 2020
  • Secured CEO, Dwight Ryan, a 33-year infertility industry leader who will work alongside Chief Scientific Officer Dr. Kathleen Miller, a worldrenowned leader in embryology, who have worked together since 2009

Target IVF Portfolio Characteristics

  • • 5-7 new clinics in regions that are underserved
  • 5-7 acquisitions, including: (i) small- and mid-size practices (<$15m revenue) looking to join a larger
    group, and (ii.) practices with physicians who are looking to retire
  • Acquisitions will be financed with a combination of equity, rollover equity and debt
  • Ancillary services at clinics (e.g., genetic testing, cryopreservation, specialty pharmacy, etc.)
  • Target platform revenue: $100+ million

Growth Strategy

  • Improve clinical outcomes (pregnancy success rates and cycle volume) through world-class operating partner, MedTech
  • Drive new patient acquisition through proven digital marketing strategies
  • Expand geographically and launch new services
  • Consolidate and build clinics in underserved regions
  • Drive efficiencies by consolidating functions such as billing, scheduling and purchasing

Firm Overview

Albaron Partners is a private equity firm focused on investing in and growing medical practices with a focus on women’s health

  • Founded in 2017, based in New York
  • Completed 3 private equity healthcare investments totalling $17.9 million of invested capital
  • Invested capital has generated a gross IRR of 47% (40% net) and a gross MOIC of 3.0x (2.6x net) over an average holding period of 2 years
  • 5 investment professionals supported by 7 operating partners

Fertility Market Overview

The U.S. fertility market is estimated at $7bn across in-vitro fertilization (IVF) ($3bn), genetic testing
($2.2bn) and reproductive tissue storage and donor services ($1.8bn). IVF services are projected to grow
at a CAGR of 10.6% from 2016 to 2022. Post-COVID recovery is expected to be robust due to a demand
backlog, an affluent patient base and the time sensitive nature of fertility

IVF stands as the most successful fertility treatment available, yielding more favorable success rates than medication or corrective surgeries. The medical service has been around since the 1970s but has gained substantial recognition and awareness over the past 10 years. From 2010 to 2017 the number of U.S. IVF cycles (a proxy for demand) increased by 95% while the number of IVF clinics
increased by 4%.

U.S. IVF Services Market ($bn)

Favorable Industry Trends Will Drive Continued Growth in a Highly Fragmented Market

The industry remains highly fragmented, comprised primarily of local and regional clinics. The top 5 players account for less than 25% of the market. Only 7% of fertility clinics complete more than 1,000 cycles per year.

The sector shows long-term demand driven by:

  • Societal Trends: Increased female workforce participation and cultural shifts are delaying childbearing. There is also growing same-sex couple demand.
  • Chronic Health Conditions: Increasing chronic conditions and health issues are causing increased infertility.
  • Reimbursement Trends: Insurance coverage and employer-sponsored IVF benefits are expanding, thereby expanding the potential patient base.
  • Awareness, Cultural Acceptance and Accessibility: Increasing awareness of treatments along with clinical advancements
    are improving success rates and lowering costs, making treatment more accessible.
  • Regulation and Foreign Demand: Many fertility services remain prohibited in developed countries, while liberal regulation and favourable success rates have resulted in the U.S. becoming a worldwide fertility destination.

U.S. Growth

IVF Prevalence by Country
IVF cycles per 10,000 people

Investment Opportunities, Returns and Pipeline

Investment Equity Capital($MM) IRR MOIC
Standard Equity Buyouts $6-24 40%+ 3x
New Build De Novo $3-4 50%+ 3x
Special Situation $2 50%+ 5x
Technology and Ancillary Services <$1 100%+ 10x+

Pipeline

  • M&A: Currently conducting diligence on four IVF practices with locations across the Midwest and South
  • New build clinics: Planning next new build for Q1 2021