Overview
Driven by market inefficiency, ancillary opportunity, and broader economic headwinds, healthcare private equity consolidation has been a leading force of change within healthcare for over a century. Starting in the late 1990’s, the primary entity behind this consolidation has been outside investors specifically, healthcare Private Equity investors, looking to partner with clinically strong providers and create regional and national platforms. Leveraging size and scale, these private equity funds invest alongside providers in medical specialties such as nephrology practices to help grow in existing and new markets.
Intrigued by a fragmented market and the potential for scalability, private equity firms are turning to nephrology practices for new investment opportunities. More physicians are finding themselves spending less time caring for their patients and more time dealing with things like regulatory compliance, insurance preauthorization, personnel and staffing matters, marketing, reimbursement and general back-office challenges. As a result, an increasing number of independent practices are turning to private equity as a solution to handle these issues, while providing the financial horsepower to fuel growth.
Among the platforms created in the specialty over recent years are Panoramic Health (Audax Group), Renal Care 360 (Pharos Capital Group), and Evergreen Nephrology (Rubicon Founders). PGP anticipates continued sponsor-backed capital will fuel new nephrology platforms and bolt-on investments over the next 12-24 months.
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 future “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
- Assist client in running a full due-diligence process on buyers to ensure the best partner is selected
- Negotiate key economic and structural deal terms, leveraging PGP experience within the Provider-Led healthcare services space
- Facilitate all pre-closing due diligence 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
