Driven by regulatory efforts, market forces, and major structural changes, growth and consolidation has dominated U.S. health care for many years.
From hospital systems and insurance providers to independent practices and specialty clinics, all corners of the health care market are experiencing investment and buyouts. Until 2020 most private equity attention was focused on specialty providers in areas like urology, ophthalmology or dermatology. However, recent interest has been forming in other physician practice management (PPM) specialties, and pediatrics is experiencing its fair share of private equity interest. Some private equity groups recognize the ability to create value through internal referrals, providing ancillary services, and keeping patients within a single network offering multiple specialties. Private equity is also attracted to the preservation of self-governance while achieving economies of scale that allow for stronger bargaining power from both payors and suppliers.
As of the end of 2023, there are 3 private equity backed platforms in the Pediatrics specialty, with Pediatric Affiliates (backed by Webster Equity Partners) formed in 2023, and Pediatric Associates (backed by Summit Partners) formed in 2019. During the creation of Pediatric Affiliates, Physician Growth Partners led that transaction, creating the first PE-backed pediatric platform in the northeast part of the United States.
The Physician Growth Partners healthcare investment banking team has successfully guided hundreds of independent healthcare providers through private equity processes, with a strong focus on helping our clients find a partner that will set the practice up for long-term success in their healthcare private equity journey.
Our team at Physician Growth Partners focuses on a number of key areas to ensure our clients are successful in the pursuit of a healthcare private equity partner:
- 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 Provider-Led sector
- 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