Pain Management Private Equity – Market Update

Pain management has been a slow and steady consolidator of physician practices over the last eight years. The specialty has seen less consolidation than other specialties due to elevated risk of reimbursement changes and the proximity to the opioid epidemic. Groups that lead with clinical excellence and bridge the gap between medication management and complex surgical procedures are seen as attractive assets to private equity and private equity backed platforms. With limited activity in 2022, 2023 has seen eight private equity transactions completed through the first three quarters. Backed by Iron Path Capital, Capitol Pain Institute has been leading the charge, acquiring assets to build density in Texas while growing into Indiana and Colorado. Despite a harsher market for newly created platforms, pain management has seen four new private equity backed platforms formed as of late. We expect the recent investment in pain management to increase add-on acquisition activity in the near future.

Another catalyst driving private equity’s interest in pain management is the move from the inpatient setting to the outpatient setting. Some clinics have been able to open surgical centers or even build out in-office procedure rooms, allowing practices to complete incremental services in-house. As a result, they can generate additional revenue while controlling the care and patient journey with little to no outside forces. The shift in place of service is attractive to practice owners, patients, as well as payors, to enhance care, grow revenue, and lower costs.

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The ability for pain management practice owners to offer patients a plethora of services in-house such as laboratory tests, certain surgical procedures, imaging, physical therapy, etc., enhances a practice’s overall financial position. These factors continue to support why pain management is experiencing continued interest from PE investors and leading to an increased number of transactions going into 2024.

The higher level of competition in the pain management space should also lead to increased multiples and additional negotiating leverage throughout a transaction for practice owners. Given the increased number of platforms in the space, engaging a trusted advisor like PGP is recommended to help fundamentally understand all strategic options available to pain management practices. As evidenced in the transactions chart below, PGP has advised three pain management practices in just the last 12 months, and we are well equipped to represent practice owners looking to explore their options.

Recent Pain Management Transactions

About Our Firm

Physician Growth Partners (PGP) Physician Growth Partners (PGP) is an advisory firm working exclusively with independent physician groups in transactions with private equity.

PGP has completed 15+ transactions in the last 12 months. Our firm is differentiated by:

• Senior partner involvement at every stage of the process
• Extensive physician practice transaction experience
• Unmatched relationships with all key private equity and strategic buyers interested in Pain Management
• Educational approach focused on partnership and cultural fit + achieving a market-clearing valuation

Relevant Physician Practice Transaction Expertise