Virtus inks $706m deal with CapVest after lengthy takeover battle

UK-based private equity firm CapVest has emerged as the victor in a lengthy takeover battle for Australian IVF operator Virtus Health, inking a binding takeover deal to buy the company’s shares at $8.25 each.

The news comes after a bidding war with local investor BGH Capital, which first put in an unsolicited bid for Virtus shares at $7.10 each last December.

The two private equity firms have been fighting for the company since then, with Virtus granting exclusive due diligence to CapVest in February for an offer of $7.60 per share.

BGH has since gone to the Takeovers Panel twice over the negotiations, claiming that the discussions between CapVest and Virtus have not resulted in the most competitive auction process.

Virtus entered a trading halt on Friday afternoon and emerged on Monday morning to inform its investors it had signed a binding deed with CapVest to buy all shares in the company for $8.25, a deal valuing the company at $706 million.

CapVest will also make a simultaneous off-market takeover offer for shares at $8.10. This deal could be enacted if the first offer fails, and would only require 50.1 per cent shareholder approval.

The agreement comes after the bidding war escalated at the end of last week, when BGH sent Virtus a new offer after the market closed last Thursday for shares at $8.10, asking for a period of due diligence first.

Virtus said its board was considering whether to engage with the BGH proposal when it received CapVest’s updated bid of $8.25 per share.

CapVest, which is headquartered in London and conducts around half of its investments in the healthcare space, has been looking for opportunities in the fertility treatments sector for some time.