2015 was a very good year for acquisitions in the Physician Medical Group (PMG) sector. With 88 transactions in total, deal volume was up 47% compared with 2014. The sector’s largest deal, Team Health‘s (NYSE: TMH) $1.6 billion acquisition of IPC Healthcare, combined two of the sector’s top acquirers (see chart below). That deal closed in November 2015.

Since then, things have gone very quiet in the PMG sector. The fourth quarter of 2015 closed with 22 deals for doc groups, beating the third quarter’s 19 deals and Q4:14’s 17 deals. So far this year, only five transactions have been made public, compared with 12 in the same period a year ago. At least a portion of the 2016 slowdown is attributable to that high-tide of deal making in Q4:15, as investors pushed to close deals by the end of the year. Another factor is Team Health’s integration of IPC into its fold.

MEDNAX (NYSE: MD) is still buying, having announced two deals in January, after picking up 11 practices in 2015. On the fourth quarter earnings call, CEO Roger Medel noted the company’s acquisition pipeline is full, with a number of deals in the LOI stage. Thanks to its May 2015 acquistion of Virtual Radiologic Corp. for $500 million, MD is preparing to branch out and acquire radiology practices in the near future. Conversations have already begun, according to Medel.

Valuations have changed, too, thanks the ever-so-slight increase in interest rates by the Federal Reserve in December. That’s good news for acquirers, who were paying double-digit multiples in 2015, but it’s bad news for those physician groups that are now looking at single-digit multiples. The latter may sit out the first half of this year, hoping for a return to 2015 valuation levels. Depending on what the Fed does with interest rates, that could be a smart move. We’re here to fill you in.

AcquirerTransactionsTotal price
IPC Healthcare 20N/A
MEDNAX, Inc. 11$500 million
Sheridan Healthcare8N/A
TeamHealth Holdings7$1.6 billion
Envision Healthcare Holdings3$240 million
U.S. Anesthesia Partners3N/A
North American Partners in Anesthesia2N/A
Premier Health2N/A