Pediatrics Private Equity - Physician Growth Partners

Pediatrics Private Equity – Market Update

Fall 2023


In the ever-changing healthcare landscape, private equity investors are increasingly turning their attention to the pediatrics sector. Several key market tailwinds are driving this trend. Payor dynamics are evolving rapidly, making primary care and pediatric care focal points for private equity investments in the physician practice management (PPM) space. Investors are also expanding into adjacent specialties like pediatric behavioral health, urgent care, urology and dentistry. The transformation from fee-for-service to managed care value-based models is prompting practices to reevaluate their operations, making them attractive targets for private equity. With over 60,000 active pediatric physicians in the United States, many operating in small groups, the sector is highly fragmented, offering significant consolidation opportunities. Additionally, a shortage of pediatric providers coupled with a growing population is driving interest in consolidation to enhance patient care and operational efficiency.

The pediatric consolidation landscape continues to evolve. While pediatrics is a relatively new area of interest for private equity, only three platforms have been established with private equity thus far, with other practices either remaining independent, partnering with hospitals, multi-specialty groups or affiliating with public entities. In a notable development earlier this year, Webster Equity Partners, recognized for their extensive experience in physician practice investments, joined forces with Pediatric Affiliates in New Jersey, through a transaction led by Physician Growth Partners. There is a noticeable surge in private equity firms prioritizing their investment theses in pediatrics and primary care. As interest in pediatrics continues to intensify, there is an opportunity for groups to position themselves strategically in this evolving market while fragmentation remains a dominant feature.

For groups looking to explore these partnerships, it is critical to consider the key factors such as maintaining clinical autonomy, integration, management fees, and establishing a local governance structure to ensure a strong go-forward partnership.

Interested in how private equity can help your Pediatrics practice?

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Recent Pediatrics Transactions

Date TargetSponsorPlatformState
2023Pediatric Affiliates*Webster Equity PartnersInitial Platform: Pediatric AffiliatesNew Jersey
2021Pediatric AssociatesTPG (Minority Recapitalization)Pediatric Associates Florida
2019Pediatric AssociatesSummit PartnersInitial Platform: Pediatric AssociatesFlorida
1995Pediatrix (FKA Mendax)Initial Public Offering (NYSE: MD)Pediatrix (FKA Mendax)Florida
1994Pediatrix (FKA Mendax)Summit PartnersInitial Platform: Pediatrix (FKA Mendax)Florida
*Advised by Physician Growth Partners

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 Pediatrics
  • Educational approach focused on partnership and cultural fit + achieving a market-clearing valuation

Relevant Physician Practice Transaction Expertise

Learn More About Pediatrics Private Equity