UBS launches raid on Virtus Healthcare

Virtus Health could be in the crosshairs of a suitor.

Investment bank UBS was buying shares on Monday for a prospective investor in healthcare company Virtus Health, fuelling suggestions that it could be in the crosshairs of a suitor.

It is understood that the group – known to be a private equity firm – was attempting to buy shares at $7.10 each to acquire 19.9 per cent of the business.

Shares in Virtus on Monday closed down 14c to $5.21.

The company’s market value is currently at $458m, with shares falling since it traded at more than $7.30 in August – the highest level in five years.

For the year to June, Virtus generated $43.8m of net profit compared to $900,000 for the previous corresponding period.

It comes after Virtus agreed a deal to buy Healius’ Adora fertility business this year for $45m only for the deal to face opposition from the Australian Competition and Consumer Commission.

The private equity firm that knows Virtus better than no other is Pacific Equity Partners.

PEP was the group that floated Virtus in 2013 in a deal that gave it a market value of about $500m.

PEP is now cashed up after a series of exits on its investments in the past fortnight.

The other private equity firm expected to have an interest in a business like Virtus is PEP’s rival BGH Capital, founded by former TPG Capital executives including Ben Gray and Simon Harle and former Macquarie Capital boss Robin Bishop.

BGH Capital is a keen investor in the healthcare space.

IVF groups are said to have outperformed other areas of the market amid the global pandemic and private equity groups typically gravitate towards the healthcare sector as they cash in on the ageing population trend.

Virtus counts Jefferies as it’s defence adviser.