2024 Fertility Practice List: Who Owns America’s IVF Clinics?

Consolidation Dominates the Fertility Market as Independent Practices Dwindle

This article was originally published on October 10, 2024 To read Inside Reproductive Health news as its released, you must be subscribed. Subscribe for free here.

By Inside Reproductive Health

The 2024 U.S. Fertility Practice Ownership List compiled by Inside Reproductive Health and sponsored by MidCap Advisors,? is a comprehensive report detailing the ownership structures of 467 fertility practices across the U.S.?

It categorizes each practice as Independent, Academic/Health System, or part of a Fertility Clinic Network, offering insights into market consolidation trends and private equity involvement. The list was compiled using data from fertility clinic websites, CDC reports, and independent expert reviews, providing an up-to-date view of the fertility industry's evolving landscape.??

The findings in this report are particularly timely, as they capture a market in flux, where independent practices are becoming less common, and fertility clinic networks, often backed by private equity, dominate the landscape.

Key Findings: Consolidation and Fragmentation

Two major trends outlined in the report highlight critical developments shaping the current landscape of the fertility industry:

1. Substantial Market Consolidation: Scott Yoder, Managing Director at MidCap Advisors notes that “There has been substantial consolidation over the past five years, with US Fertility capturing a significant market share compared to the other consolidators through their substantial Shady Grove and Ovation transactions.” This trend highlights the dominance of a few major players, particularly US Fertility, which has emerged as a market leader through larger strategic acquisitions.
2. Shrinking Independent Practice Market: The Fertility practice market is becoming less fragmented, with the remaining independents being smaller clinics scattered across the country. The list indicates that 50% of U.S. states now have three or fewer independent fertility practices, with 12 states having just one independent clinic.?

Consolidation: Historical Trends and Future Outlook

According to Robert Goodman, VP of Healthcare at MidCap Advisors, “The peak of fertility mergers and acquisitions (M&A) occurred in 2021, driven by favorable economic conditions and aggressive acquisition strategies.” However, the market has since cooled slightly due to financial headwinds, the lower number of larger practices, and the increased complexity of deal-making.

Yoder explains, “As consistent with any industry consolidation, size matters. The fertility market was no exception. The practices with larger REI groups were pursued and acquired first. What typically remains are independent practices with 1 to 4 REIs, with a significant tilt toward the lower end of that range.” This reflects a clear preference for larger, multi-physician practices by investors, leaving behind a fragmented market of smaller independent clinics.?

Looking forward, the fertility M&A deal count will trend down due to the limited REI fragmentation that remains. “Approximately 50% are single REI practices which buyers typically have no appetite for due to continuity risk and the smaller deal size. Although there may be a lower projected deal count, there will still be steady M&A deal activity that will be fueled by the aging REI ownership, the falling? interest rates, the sizable dry powder still looking to be deployed by private equity, and transactions among the larger players” notes Yoder.??

Additional Key Observations

Several other important trends also emerge from the list:

• Geographic Concentration: Six states—California, New York, Texas, Florida, New Jersey, and Illinois—account for 56% of the remaining independent fertility practices. This concentration in larger, more populous states reflects the increasing geographic focus of consolidation efforts, as private equity investors and networks seek to capture market share in high-demand regions.
• M&A Activity Slowing: Although M&A activity in the fertility sector remains strong, it is down approximately 25% from its 2021 peak. Nonetheless, current deal counts are still 70% higher than pre-2021 levels, reflecting continued investor interest in the sector..
• State of Independent Practices: The list indicates that single-REI practices represent a significant portion of the remaining independent market. These smaller operations may find it increasingly difficult to remain competitive unless they consider partnerships or mergers with similar-sized practices, positioning themselves for future growth or acquisition.

List Published, Available Now

The 2024 U.S. Fertility Practice Ownership List is now available, offering the most up-to-date and comprehensive snapshot of fertility practice ownership across the U.S., and answers how many and which of them remain independent.