Private equity firms can’t get enough of physician medical gropus, especially the specialty practices. In the first eight months of 2018, 153 deals have been announced in this sector. With four months left to go, there’s plenty of time to top last year’s total of 168 transactions.
Private equity firms made 21 direct acquisitions this year, about 14% of the 153 announced deals. Companies owned by private equity firms accounted for 51% of the total.
You can bet that, if private equity-sponsored deals made up 65% of the year’s total, valuations are going through the roof. And you’d be right. Sources tell us that the fevered-pitch interest in specialty physician groups such as dermatology, ophthalmology and all forms of dentistry has driven multiples north of 10x EBITDA this year — well north.
New platforms are popping up constantly. In the past month, we’ve learned of U.S. Oral Surgery Management, a specialty management services company focused on oral and maxillofacial surgeons. It was formed in 2017 by RiverGlade Capital and The Thurston Group, and announced three transactions in July and August this year. Blue Sky Vision, a management service organization for ophthalmology practices, was created in early 2017 by Sterling Partners and Grand Rapids Ophthalmology. It announced three deals in August 2018 to get its platform started.
If you want to learn more, we’ll be discussing the specialty physician medical M&A market on Thursday, September 13, 2018 from 1:00pm to 2:30pm ET.
Panelists are Andrew Colbert from Ziegler, Lesley Levinson from Robinson & Cole and Jeff Swearingen from Edgemont Capital Partners. Join us for a great discussion and in-depth look at what’s driving deals in this sector.
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