Japanese financial services firm Orix Corp. is in talks to buy a minority stake in Bengaluru-based fertility clinic chain Nova IVI Fertility, two people close to the development said.
According to the first of the two people, Orix plans to buy shares from the company’s promoters and existing private equity investors for Rs250-300 crore.
At present, Goldman Sachs Group Inc. and New Enterprise Associates (NEA) together hold about 51% while GTI Group holds about 15%.
The rest is owned by promoters including founder Mahesh Reddy.
The details of stake dilution and company valuation are not available. Investment bank Lincoln International is advising the company.
The second person, who said talks have been on for the past 6-8 months, said a couple of global private equity funds, too, are in talks. Both people spoke on condition of anonymity.
Mails sent to spokespersons at Orix, GTI Group, NEA and Goldman Sachs on Friday were not answered.
Mails and calls made to the Nova Medicare spokesperson went unanswered.
Orix, one of the world’s largest diversified financial services groups, had invested 49% of the equity of the wind platform of Infrastructure Leasing and Financial Services Ltd (IL&FS) in March last year.
In 2012, Nova Medical Centers, the parent company of Nova IVI Fertility, raised $54 million from Goldman Sachs and NEA for expanding its specialty surgery and fertility centres, with Goldman Sachs investing nearly $40 million and NEA $14 million.
Established in 2009, Nova Medical had raised about $16 million in 2010 from NEA and GTI Capital.
At present, Nova has 11 fertility clinics across eight cities in India and one in the Middle East.
In 2015, Nova Medical Centers sold Nova Specialty Hospitals, the daycare and short-stay surgeries division to Apollo Health and Lifestyle Ltd (AHLL), a wholly owned subsidiary of Apollo Hospitals Enterprise Ltd.
Nova Medical board consists of Suresh Soni, a former managing partner, GTI Group and co-founder and chairman, Nova Medical Centers; Dr. Mahesh Reddy, co-founder and executive director of Nova Medical Centers; Harsh Nanda, executive director, Goldman Sachs, and Bala Deshpande, senior managing director, NEA.
In addition to assisted-reproductive therapy treatments such as intrauterine insemination (IUI), in vitro fertilization (IVF) and andrology services, Nova IVI provides services such as vitrification for preserving embryos and eggs, embryo scope and ERA to find out the timing of the uterus’ capacity to accept embryos, according to the company website.
Infertility, or the inability to conceive by natural means, is a medical condition with high prevalence affecting nearly 10-15% of married couples in India, according to a 2015 report by advisory firm EY.
IVF cycles, or the number of fertilization processes, are estimated to increase from an estimated 100,000 cycles in 2015 to 260,000 cycles by 2020, driven by an increase in the number of infertile couples seeking treatment, said the report: Call for Action: Expanding IVF treatment in India.
About 75% of the IVF market in India is captured by the top 500 clinics, comprising of a few corporate chains and leading private clinics, while the rest is held by unorganized players, added the report.
In the past couple of years, private equity and strategic buyers have been keen on speciality healthcare services in India.
The niche areas of infertility, mother and child care, urology, cancer care and eye care have seen private investments in the recent past.
Last year, TPG Growth, the middle market growth equity investment platform of global private investment firm TPG, acquired Bengaluru-based Rhea Healthcare Pvt. Ltd, which operates a network of mother and child care centres in India under the Motherhood brand.
In 2015, another Bengaluru-based maternity and infant care chain, Cloudnine Hospitals, received Rs400 crore investment from private equity fund India Value Fund Advisors, now Tru North, for a minority stake.
Cloudnine already has investments from Matrix Partners India and Sequoia India. TPG Growth had also acquired a majority stake in India-focused cancer treatment chain Cancer Treatment Services International (CTSI) last year.
In October, Oasis Centre for Reproductive Medicine, the Hyderabad-based leading chain of IVF centres, had raised $6.2 million (Rs40 crore) from India Life Sciences Fund II.
Source: Mint