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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