What began in 2014 as a grand round of acquisitions of physician medical groups became a multi-billion-dollar exit four years later.
Fresenius Medical Care (NYSE: FMS), the world’s largest provider of dialysis products and services, took “an important strategic step to sharpen its U.S. Care Coordination profile” and sell its controlling interest in Sound Inpatient Physicians Holdings, LLC for $2.15 billion. The buyers are led by Summit Partners, a Boston-based private equity firm.
Back in June 2014, Fresenius acquired Sound Physicians, as it was called, for $600 million. The group was comprised of more than 1,000 physicians in more than 100 hospitals. The acquisition was in line with Fresenius’ strategy at the time, which was to invest in care coordination around dialysis patients. At the announcement, Fresenius expected the group to generate approximately $500 million in revenue over the next 12 months.
In October 2014, the company acquired National Cardiovascular Partners, a 200-plus physician group based in Houston, for an undisclosed price. Expected revenue was in excess of $200 million in 2015, according to Fresenius.
In November 2014 came news that Sound Physicians acquired Cogent Healthcare, with more than 650 providers delivering hospitalist and intensivist services to more than 80 hospitals throughout the United States.
Its last announced purchase was in March 2017, with the addition of Eagle Hospital Medicine Practices and its two divisions, Eagle Telemedicine and Locum Connections, based in Atlanta, Georgia. The practice’s 150-plus hospital medicine providers practiced at 16 hospitals around the country.
The deals gave Fresenius a physician’s eye view of acute episodes of care, through the practices’ expertise in emergency medicine, critical care, hospital medicine, transitional care and advisory services. The advent of the Bundled Payments for Care Improvement initiative gave Fresenius experience with value-based care programs, and possibly instigated this sale.
Summit Partners have long experience with large, multi-specialty physician groups. In August 2017, the firm sold the majority of its stake in the 600-physician DuPage Medical Group with more than 80 locations in suburban Chicago. The buyer, Ares Management, paid $1.45 billion, which included DMG Practice Management Solutions and Boncura Health Solutions.
