City Fertility: A Cross-border Partnership · treatments, bio-banking, anti-ageing and cosmetics...

17 May 2018

City Fertility: A Cross-border

PartnershipPresented by David Nathan

Chairman, City Fertility

17 May 2018

Brief history of City Fertility

Beginning

• Launched in 2003 in Brisbane with 1 clinician and 1 embryologist

• Initial strategic plan was to become the largest fertility care

provider in Brisbane

Today

• One of Australia’s largest IVF groups with 40+ doctors, 150

employees and 8 clinic centres including Brisbane, Melbourne,

Sydney and the Gold Coast

17 May 2018

What we looked like in 2016-7

• Local market shares by state

ranging from 2.5% to 10%

• 40 clinicians

• 4th largest player in Australia

• Proprietary sub-brands for

niche service areas:SA

QLD

NSW

VIC

Adelaide Clinic

Brisbane CBD Clinic

Brisbane South Clinic

Gold Coast Clinic

Sydney Liverpool Clinic

Melbourne North Clinic

Melbourne CBD Clinic

Sydney CBD Clinic

17 May 2018

Why we explored an outside investor

• Strong 12-year growth track record, but:

❑ Changing domestic landscape for care delivery

❑ Growing need to look beyond Australia for

international best practice

❑ Greater competition from large “corporatised”

competitors

❑ Access to new and future technological advances

❑ Need to invest to compete

17 May 2018

Investor search process

• Engaged PwC to explore investor options:

❑ International IVF players

❑ Domestic and international healthcare groups

❑ Domestic and international private equity

17 May 2018

Our investor criteria

• Domestic and Asian growth

• Medical leadership

• Reputation

• Approach to management

• Cultural compatibility

• Transaction experience

• Synergies

17 May 2018

Responses

• 100+ international and domestic organisations expressed interest

• Strong international interest:

❑ China

❑ United States

❑ New Zealand

❑ Spain

❑ United Kingdom

❑ India

❑ South Korea

17 May 2018

Outcome

• Selected a consortium led by CHA Healthcare (CHA) and

Singapore Medical Group (SMG)

• CHA as lead investor and majority shareholder of combined 65%

stake

• Unique structure to preserve ongoing equity ownership and

participation by existing doctors and management

• Deal completed in 100 days (April 2018)

• Began PMI early to maximise operational and cultural familiarity

17 May 2018

Why CHA-SMG?

Competencies

• CHA’s international reach with operations in Korea, Japan,

Singapore and the US

• Strong history of international research leadership

• Complementary premium healthcare segments including stem cell

treatments, bio-banking, anti-ageing and cosmetics

• Global scale with more than 30,000 IVF cases / 9,000 deliveries /

14 general and specialty hospitals treating 2.5m patients annually

17 May 2018

Why CHA-SMG? (cont’d)

Synergies

• Corporate capability and compatibility

• Similar growth aspirations

• Global reputation

• Key medical drivers

❑ Best-of-breed use of technology

❑ Quality of their clinician team

❑ Our key belief that research drives success and CHA undertaking over

300 international fertility and stem cell research trials annually

❑ Pregnancy rates accepted as a fundamental driver of success

17 May 2018

The journey so far

• We are more attractive to clinicians and patients alike

❑ Updated strategies around marketing and consumer experience

• Stronger corporate and cultural synergies

❑ Patient experience and outcomes as the main priority – growth and profits will follow

❑ Redefine the conventional concepts of “success targets” in Australia

• Enhanced access to global health partnerships and suppliers

❑ Leverage to develop R&D partnerships with leading Australian universities and

researchers

❑ Adding advanced new technologies

• Stronger business analytics and technological platforms

❑ New perspectives on business metrics

❑ Building new data analytic tools

17 May 2018

Driving CFC evolution

Marketing Example

• New logo, branding and consumer proposition

• Emphases on CFC’s key points of differentiation

• Specialised services for international and ethnic cohorts

• Mobile-enabled and social media savvy

(Old CFC online marketing)

17 May 2018

Marketing example: impact

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FY 15-16 FY 16-17 FY 17-18 FY 18-19 FYI 19-20

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CFC Group Enquiries and Specialist Appointments Jul 2015 - Sept 2019

Enquiries CFCGroup

Appts CFC Group

Post-Signing Increase in Volume

17 May 2018

Technical collaboration

• Joint conferences in Gold Coast and Thailand attended by more

than 800 participants

• Exchange program for lab specialists

• Joint review of new technologies from Australia and Korea

Re-positioning for the future• CFC’s Australian Flagship Clinic to be officially opened on 21

November at Gateway at Circular Quay, Sydney

• Developed Australia’s most advanced and modern IVF Centre

• Dual Clean Room Laboratories system

• Dual dedicated day theatre complex

• Design collaboration between Australia, Korea, United States and

Singapore to ensure optimal patient treatment experience

17 May 2018

Summary

✓ Found a partner with healthcare leadership beyond just IVF

✓ Compatibility of skills and visions

✓ Long-term wins over short-term

✓ New modes of thinking about old problems

✓ Constantly strengthening our foundations for future growth

✓ Bring together the best of Australia and Korea to seek out new

international opportunities