Read the original article in LevinPro HC – Editor Kate Humphrey, Levin Associates

August 27, 2024 – Physician Growth Partners (PGP), a physician-focused advisory firm based in Chicago, Illinois, recently played a major role in the acquisition of two physicians by Cardiovascular Associates of America (CVAUSA).   

The two physicians, Drs. Ken Zelnick and Kathir Subramanian, offer high-quality cardiology services out of Fort Lauderdale, Florida. Along with two other unnamed providers, Drs. Zelnick and Subramanian deliver comprehensive diagnostic, medical and procedural services.  

CVAUSA, formed by Waltham, Massachusetts-based private equity firm Webster Equity Partners in 2021, is a physician management services organization. Through CVAUSA’s physician-centered practice management model, physicians drive clinical care and their practice culture, while benefiting from the business expertise and shared resources available through CVAUSA.  The company is headquartered in Celebration, Florida. 

Ezra Simons, a partner at PGP, provided invaluable insight into the transaction. According to Simons, PGP’s involvement began around November 2023 when Dr. Zelnick reached out to the advisory firm.  

Simons also noted that early in the process, between 12 to 15 different companies were being considered, which was then paired down to four or five companies. It was then in Spring 2024, that CVAUSA was identified as the best acquirer candidate.    

“Ultimately, we were able to help Drs. Zelnick and Subramanian validate for themselves that CVAUSA had a strong track record of supporting their partner groups. This includes actually helping physicians drive growth. Drs. Zelnick and Subramanian were able to be comfortable with CVAUSA because they, the doctors, would retain control of the day-to-day operations and a documented level of clinical autonomy where they’d be able to practice without interference,” said Simons. 

But, of course like any acquisition process, this transaction was not without its challenges. However, PGP was able to use their vast experience to overcome the challenges that arose. Simons said, “Having the experience of doing more than 60 physician transactions over the last few years provides us the base to navigate challenges as they arise throughout the process; spoiler: they always do. Understandably, a potential buyer is going to carry out multiple streams of due-diligence and issues come up whether it’s accounting related, compliance related, or pertains to specific contracts or arrangements that the client may have. Understanding how to navigate these nuanced issues creatively toward solution is the difference between getting a transaction completed versus not. Many doctors trying to represent themselves get lost in one or more areas and deals do not get completed.” 

According to data captured in the LevinPro HC database, this acquisition represents CVAUSA’s third transaction in 2024. In 2023, the company completed three acquisitions. There have been 325 Physician Medical Group transactions announced during 2024, 10 of them in the cardiology space. Throughout 2023, there were 30 cardiology acquisitions reported. 

Simons also noted that while 2024 has seen less deals than 2023 (as evidenced by above), the previous two months or so have seen an uptick in activity. He believes that there is reason to be optimistic that the coming months will continue to be busier with deal activity.  

His reasons for this optimism are the interest rates settling and people becoming more comfortable with the environment. Simons also noted that during presidential election years, deal activity typically decreases before increasing as buyers and sellers wait for the results before proceeding. 

Are you a journalist covering trends in Healthcare Services M&A? Reach out to our team at PGP for additional insights on the market: [email protected]