Monash IVF, an ASX-listed company, has announced its agreement to acquire a fertility clinic in Perth for an initial sum of AUD 12 million. This move further solidifies Monash IVF's presence in one of Australian healthcare's most resilient markets.
Under the terms of the agreement, Monash IVF will initially acquire an 80% stake in the Fertility North clinic, with plans to acquire the remaining portion within the next three years. There is also potential for earnouts during this period.
The acquisition of Fertility North is expected to have a positive impact on Monash IVF's financials. With Fertility North generating AUD 9 million in revenue, it is estimated that Monash IVF's annual adjusted net profit could increase by approximately 4%, based on fiscal 2023 figures. Monash IVF reported an underlying net profit of AUD 25.3 million for the 12 months through June 2023.
In a statement, Monash IVF highlighted the strategic benefits of the acquisition, stating that it provides them with access to Perth's northern growth corridor, an area experiencing rapid expansion and presenting a sizable market opportunity.
Despite cost-cutting measures being implemented across various sectors, including retail and healthcare, the demand for IVF treatments remains robust. In fact, the number of IVF cycles recorded in Australia's state health system in November was the second highest on record, representing a 17% increase compared to the previous year.
Analysts from Macquarie have expressed confidence in Monash IVF's ability to capture a larger share of Australia's IVF market, emphasizing the potential for further growth through strategic acquisitions.