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 medical practices and specialty clinics, all corners of the health care market are experiencing investment and buyouts, with more and more large superregional and national platforms being established. Women’s health was one of the first areas to receive attention as part of this movement but only in the past few years has it been seeing significant new investment growth.
Ares Private Equity partnered with Unified Women’s Health, to create the first women’s health platform in 2013, but during the past three years, the market has added several additional investors. There are now eight PE-backed platforms, which our team expects will continue grow. Women’s Health practices share many of the same conditions as other physician specialties experiencing growth and successful waves of consolidation. There is significant service fragmentation, combined with an imbalance between provider supply and patient demand.
As of October 2022 private equity groups have concluded 8 large investments in women’s health platforms around the U.S. This compares to 9 women’s health deals in all of 2021. Private equity buyers are eager to acquire the consistent cash flow and growth potential that women’s health practices can provide. During a time of uncertain investment returns, all of us at Physician Growth Partners expect this interest to continue to grow.
Michael Kroin and Ezra Simons founded Physician Growth Partners (PGP) in 2017 to proactively advise and advocate for practice groups exploring a sale to PE investors. Women’s health practices that partner with private equity can scale their operations to better compete with large hospitals while unlocking new growth opportunities, maintaining clinical excellence, and ensuring that physicians retain ownership, which is the key to autonomy.
Our team has successfully guided women’s health practices through the private equity process. There are several steps that we take to ensure successful outcomes for our clients, these include:
- 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 women’s health specialty
- 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