Progyny ($PGNY) – M&A – June 29, 2024
Progyny has no debt, is buying back shares and is investing heavily in organic growth. It has excess cash and a pristine balance sheet. That creates flexibility, which Progyny exercised this week.
The company is purchasing Apryl in Germany to extend its fertility benefits program across the pond. Apryl’s product approach and structure closely mimic Progyny’s in the states. They aim to drive better outcomes through more custom treatment, superior education and direct integrations with carriers and employers. Progyny has already offered some basic educational services outside of North America, but this will mark its formal entrance into fertility treatment in Europe. Apryl actually operates across Europe with 3,000 clinics and 1,000 specialists and provides menopause service too, which Progyny is trying to expand into. It calls itself the “top fertility benefits provider in the UK and Europe.
“We are now able to work with global employers to provide family building benefits in over 100 countries, supporting patients in over 225 languages.”
Progyny CEO Pete Anevski
I love this decision. Progyny now has its foot in the door to many, many more fertility markets. And in Europe, Assisted Reproductive Treatment (ART) plans are structured in a way that allows 10% of live births to be via ART vs. just 2% in the USA. The path of resistance is easier outside of the USA, where Progyny has already delivered great success and a large market share lead. It’s worth noting that the smaller relative inefficiency means players like Progyny and Apryl can’t quite provide as much unique value as in the USA. Still, there’s plenty of value to add and plenty of incremental business to collect.
If I had to guess, Progyny probably just wanted the licensing and plan design knowledge from this company. I would expect it to emulate the treatment plan design that works so well in the states with Apryl’s footprint and to merge potential best practices to perhaps uplift design a tad further. It was getting a tad frustrating seeing Progyny’s cash pile continue to build with no plans on using the dry powder. This is the most ideal way I think they could have used these funds. Apryl raised $4 million in 2022, which likely means this was a very small purchase.
Meta’s Europe business and Soundcloud are customers of Apryl (Meta is Progyny’s customer in the USA).
