KKR doubles down on fertility treatment with €3B Ivirma deal

KKR (as anticipated) recently agreed to buy Ivirma in a deal valuing the global fertility treatment giant at €3 billion ($3.2 billion) or more, three sources tell Sarah.

Why it matters: As startups left and right emerge to tackle fertility inequality challenges and drive up utilization, KKR has swiftly made a huge splash in assisted reproduction technology.

• KKR as the buyer comes as no surprise. The buyout firm was reportedly nearing a deal in late March for the Spain-headquartered company after outbidding other private equity firms.
• Ivirma, spanning nine countries across Europe and the U.S., claims it is the largest reproductive medicine group in the world — welcoming patients from more than 180 countries.
• Ivirma follows KKR's purchase of GeneraLife, another sizable European fertility clinic network.

By the numbers: Sources placed Ivirma's EBITDA at €120 million, implying a 25x-plus multiple.

• Price talk was in the €2.5 billion to €3 billion range, Bloomberg wrote previously, and sources tell Sarah that other investors bid around the low end of that range.
• Ivirma could mark one of the first big debt deals to come to market following Russia's invasion of Ukraine, Bloomberg separately wrote ahead of the deal.

State of play: Considered a play on both primary care and value-based care, PE firms in the U.S. have made notable bets at big valuations in OB/GYN practice management. Fertility remains behind OB practices from a consolidation perspective.

• Many women consider their OB their PCP, and the sector lends itself to value-based care arrangements as maternity is a discreet episode of care.
• Of note, Altas Partners in late 2020 invested in Unified Women's Healthcare at an ~$1.55 billion value, sources told Sarah then, before forking out $775 million for CCRM to push into fertility treatment.
• Other investors in the fertility space include Lee Equity Partners, Morgan Stanley Capital Partners, InTandem Capital Partners and Webster Equity Partners.

Yes, and: Attention is soaring around a proliferation of startups focused on fertility treatment and women's digital health.

• In February, Gaia debuted its personalized IVF insurance product on the Lloyds of London market amid a $20m Series A funding.
• Also in February, FemTec Health unveiled Awesome Woman, a subscription-based digital pharmacy and telehealth platform, its founder told Erin exclusively.
• In March, Noula Health raised $1.4m in pre-seed funding for its fertility and reproductive health support tool, its founder told Erin exclusively.
• This month, Future Family, a startup combining fertility financing and care support, collected $25m in Series B funding, its founder told Erin exclusively.
• Also in April, Evernow, which serves women in menopause or perimenopause, scored $28.5m in funding led by NEA, along with celebrity investors including Gwyneth Paltrow.

What we're watching: Will KKR's bet encourage more consolidation of the fragmented U.S. fertility treatment market, and what's on Ivirma's shopping list?

KKR and Ivirma declined to comment.