With strong demand drivers, the UK fertility sector continues to attract international investors and acquirers. View our insights into the market in the report below.
Fertility market drivers
After years of consistent growth in the number of IVF cycles across the UK, levels have stabilised since 2017
This suggests a stagnating market, however, the plateau in cycles is influenced by NHS England funding cuts, which have altered the overall market split between private and NHS-funded treatments
In fact, demand drivers are very positive, with a number of factors suggesting the market will remain buoyant:
A rise in the average age couples choose to have children
Greater number of same sex couples seeking IVF
Increasing prevalence of male and female infertility
Greater social acceptance of IVF
Improved IVF success rates due to advances in technology
Growing accessibility to digital fertility devices and apps
These factors are driving forecast market growth at a CAGR 5.9% through to 2030
The fertility sector is also becoming increasingly globalised, with several operators establishing themselves as truly multi-national players, capitalising on opportunities in geographies where fertility treatments are underpenetrated
As technology continues to advance, the ability to standardise processes will drive synergies for large groups, leading to margin improvements and pricing pressure on smaller operators
Growth in UK IVF cycles
M&A in the fertility market
During the market’s high growth years, private equity-backed players deployed significant capital through the opening of new clinics and selective acquisitions to generate scale and “land grab” as the market expanded
As the market matures, the ability to grow organically through the creation of new clinics will become more challenging and bolt-on acquisitions will be attractive options
A shortage of multi-clinic acquisition targets, however, will drive up valuations of the few remaining privately owned players of scale when sale processes take place
This demand has been demonstrated not only through domestic deals, but also through the entry of international operators into the market through acquisition (such as FutureLife, IVF Life and IVI)
Smaller single clinic operators face more challenging exit options, with limited scale and key person risk influencing their attractiveness as acquisition targets for larger groups
The merging of smaller players may therefore take place to optimise exit options, as founders of clinics in the high growth years look to retire in the medium term
Genus Medical Partnership is an example of this approach, looking to group together single clinics where they have a limited ability to scale in isolation, but can draw upon the resources of a broader network of clinics
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