The doctor who is director of reproductive surgery at The Women’s Hospital in Victoria is one of the big winners out of yesterday’s float of in-vitro fertilisation treatment company Virtus Health.
In the first ever listing of an IVF company, Virtus Health debuted on the ASX at noon yesterday and traded at 50c, or around 8.5% above where the offer price for its float was set.
This was good news for Dr Lyndon Hale, a Virtus director and one of the doctors with the largest shareholdings in the IVF company.
Hale made more than $400,000 today on the $4.7 million worth of shares he took into the float; however, those shares are subject to escrow provisions.
Hale is just one of 80 medical specialists and medical scientists who hold $104 million worth of shares in Virtus Health collectively.
But Hale told SmartCompany he barely had time to pay any attention to the float after a busy day at the hospital following the long weekend.
“I haven’t had time to focus on it, it was a normal day for me and a very busy day for me,” he says.
“I was pleased to see that the price went up and really that is the confidence that the market has said it is a good company, and we think so.”
Hale says he has no plans to retire.
“A big pot of money is not what gets doctors out of bed in the middle of the night, it’s a vocational calling or profession that people are committed to,” he says.
Hale says a lot of the senior doctors with a stake in the float have been working in the area of IVF for 20 to 30 years, including Dr John McBain who was involved in the first ever IVF birth in the world in Melbourne.
Hale says having an equity partner, Quadrant, allowed the doctors to focus on their practice instead of the float.
“That was an experience to work with someone from the business world. I was impressed with the amount of due diligence and the attention to detail that goes with an initial public offering,” Hale says.
He says an IPO had been in the pipeline ever since the doctors took on Quadrant Private Equity as an equity partner in the business and the doctors were guided by Quadrant as to the timing of the listing.
“We took on [Quadrant] as we wanted to expand the business in terms of research and it has been an ongoing discussion over the last four or five years,” he says.
“The doctors expertise is in medicine, so we are influenced by the advice that we get and the people who know more about that. We believe it’s a great business, but we think that the model works for doctors because there are incentives there for both, and IVF itself in treating infertile couples is a great medical thing to do.”
It is believed Quadrant made an initial $33 million investment and then added more capital at a later stage.
The private equity backer sold down its initial 46% stake down to 33% around the time of the premarketing for the IPO.
But it still made money on the deal through dividends paid to the firm by the company as a result of the capital return on the initial investment and following the final sell down of its stake.
Investors who bought in pre-float, such as the clients of brokerage networks RBS Morgans, CommSec, Bell Potter Securities and within the private client businesses of Morgan Stanley and UBS, would also have done well out of the float.
Sue Channon, chief executive of Virtus Health, told SmartCompany she was very pleased with the outcome of the IPO and the first day’s trading.
“Virtus listing on the ASX, the first publicly listed IVF group in the world, is another milestone in this organisation’s history and will allow us to continue to provide Australians with access to IVF technology,” she says.
“It will also enable us to undertake the next part of our journey to deliver a broader range and network of services to wider international communities with the support of our new investors.”
Cara Waters is the editor of SmartCompany. Cara was previously a senior reporter at the Financial Times website FT Adviser in London and has also worked for The Sunday Times.
