Driven by regulatory efforts, market forces, and major structural changes, growth and consolidation has dominated U.S. health care for more than a decade.
From hospital systems and insurance providers to medical practices and specialty clinics, all corners of the health care market are experiencing investment and buyouts, with more and more large superregional and national platforms being established. Eye care has been at the forefront of this trend.
Private equity investment in the eye care sector is not new. PE firms have been tightly focused on this specialty since 2017 and those efforts have only expanded in 2022.
Eye care and opthalmology practices share many of the characteristics with other physician specialties that have experienced growing and successful consolidation waves. There is significant service fragmentation, coupled with imbalances between provider supply and patient demand.
As of late 2022 private equity groups made more than 35 large investments in more than 30 different eye care platforms around the U.S. In fact, there were more than 10 deals closed in September 2022 alone. Private equity buyers are eager to acquire the consistent cash flow and growth potential that specialty practices like eye care can provide. During a time of uncertain investment returns, all of us at Physician Growth Partners expect this interest to continue to grow.
Michael Kroin and Ezra Simons founded Physician Growth Partners (PGP) in 2017 to proactively advise and advocate for practice groups exploring a sale to PE investors. Eye care and ophthalmology practices that partner with private equity can scale their operations to better compete with large hospitals while unlocking new growth opportunities, maintaining clinical excellence, and ensuring that physicians retain ownership, which is the key to autonomy.
Our team has successfully guided several eye care practices through the private equity process. There are several steps that we take to ensure successful outcomes for our clients, these include:
- Develop the appropriate financial modeling to position maximized cash flow and “credit” for ongoing initiatives that are driving growth
- Determine the right mix of potential buyers (including both strategic acquirers and private equity groups) and implement a strategy to reach them
- Managing buyer marketing, bid solicitation, and negotiation
- Position the client to meet relevant potential buyers with strong offers that address cultural fit, strategy, and alignment
- Manage the transaction process to maximize leverage with potential buyers
- Negotiate key economic and structural deal terms, leveraging PGP experience within the eye care specialty
- Facilitate all due-diligence pre-closing to ensure a seamless process that does not take away from the day-to-day business while ensuring the highest probability for a successful close
- Maximize financial results for shareholders while maintaining clinical autonomy