Fertility treatment provider Monash IVF Group Ltd (ASX: MVF) is finally starting to pull ahead of its rival Virtus Health Ltd (ASX: VRT) as investors warm to the former’s latest acquisition news.

Shares in Monash IVF jumped close to 6% to $1.49 this morning, taking its year-to-date gain to 6.8% compared with Virtus’ 6% drop.

Monash IVF said yesterday it was buying diagnostic facility Sydney Ultrasound for Women for $30.1 million and that the deal will be immediately earnings accretive.

Sydney Ultrasound for Women generated $19 million in revenue in 2013-14 and fits into Monash IVF’s strategy to acquire smaller complementary businesses.

The deal looks attractive with RBS Morgans estimating that the acquisition was priced on an earnings before interest, tax, depreciation and amortisation (EBITDA) multiple of around 7.8 times, based on a margin assumption of 20%.

This multiple is in-line with recent acquisitions in the sector.

While Mondash IVF’s gearing will increase to 76% from 61%, the broker believes that interest cover will remain comfortable at 6.1 times.

This acquisition should go some way to addressing concern about Monash IVF’s ability to meet full year prospectus forecast. Management warned last month that the company may not meet expectations due to the weak domestic economy as spending on fertility treatments is correlated to discretionary spending.

Shares in Monash IVF are down 22% since listing, compared with Virtus’ 14% decline.

Both companies are pursuing the same pathway to growth and have expanded beyond our shore with Monash IVF expanding into Malaysia and Virtus buying a UK business recently.

Monash IVF looks good value if it can achieve similar success with its acquisition strategy as G8 Education Ltd (ASX: GEM).

Stocks with defensive and transparent earnings streams are likely to be in demand during these volatile times.

Further, Monash IVF is trading on an estimated 2014-15 yield of around 5%, before franking credits.

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Motely Fool contributor Brendon Lau does not own stocks mentioned in this article. Follow me on Twitter (https://twitter.com/brenlau).

The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead.  This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.