Verlinvest, a firm founded by the families that own beer maker AB InBev, has acquired a controlling stake in India’s Ferty9 Fertility Center, marking the European investor’s first investment in the country’s healthcare sector.
The investment firm has pumped $50 million into Ferty9 to support the development of new technologies and medical innovations in infertility treatment.
The deal comes amid increased interest in the Indian IVF sector, which is projected to reach over $1.5 billion by 2026, clocking an impressive CAGR of 15%. “To facilitate this evolution and maturation, consolidation is paramount. That’s why we are delighted to be partnering with Verlinvest to unlock Ferty9’s potential for greater scale, efficiency, and innovation,” said Vinesh Gadhia, Executive Director & CEO, Ferty9 in a statement.
Two senior investors from Verlinvest who led this investment, Shagun Tiwary Shah and Manvitha Janagam, will join Ferty9’s board of directors, adding to the 70% of employees at Ferty9 who are women.
Verlinvest’s acquisition of a controlling stake in Ferty9 Fertility Centre signals the firm’s investment plans in Indian healthcare after spending several decades investing in the sector in Europe.
Earlier this week, DealStreetAsia reported that Baring Private Equity Asia (BPEA) has initiated talks to invest in Indira IVF, as a number of shareholders in the Indian infertility clinic chain were considering selling their stakes to raise funds. The investment is expected to pave the way for the exit of Indira IVF’s existing investor TA Associates.
“As of now, [TA Associates] is looking to do a partial stake sale. However, it all depends on the kind of negotiations that happens between the company and the investors,” a source told DealStreetAsia.
The Indian IVF sector is estimated to be underpenetrated by 9-12 times than the addressable demand in key cities such as Delhi, Mumbai and Bangalore. Among other recent deals closed in the IVF sector include Oasis IVF, which raised about $50 million from homegrown PE fund Kedaara Capital last year.
In the overall healthcare space, too, M&A activity is increasingly gaining steam with the latest deal being Singapore state investor Temasek picking up a stake in Manipal Health Enterprises. Other investors who have recently invested in the sector include IIFL PE, General Atlantic, and Ontario Teachers’ Pension Plan (OTPP).
The need for funding has gone up as hospitals are focusing on a ‘cluster approach’ — wherein they operate in a location cluster to tap brand, cost, practice and management synergies — to cash in on the huge pent-up demand for various treatments that had taken a backseat during the COVID-19 crisis.