It takes a big platform to combine a prominent urgent care company with a major multi-specialty practice. Warburg Pincus is now providing that platform.
On June 21, the private equity firm announced its urgent care company, New York City-based CityMD, will merge with Summit Medical Group, a physician-owned multispecialty medical practice anchored in Berkeley Heights, New Jersey.
The combined organization aims to deliver high-quality medical care, which is the stated goal of every decent healthcare provider. The key component is convenience, delivered via its network of physicians and care locations from New Jersey to Long Island, New York.
CityMD was founded in 2010 by Dr. Richard Park and other physicians as a single walk-in urgent care practice in Manhattan. By the time Warburg acquired a majority stake in the company for approximately $600 million (including debt), CityMD had nearly 68 locations primarily in New York and New Jersey, with a few in the Seattle area. Now it operates more than 100 locations in the New York metro area and has treated more than 3 million patients.
Not all that growth was organic. In 2013, CityMD merged with Premier Care, another local urgent care provider. And with Warburg’s backing, it acquired two more local urgent care providers in February 2018. STAT Health, with 14 locations on Long Island, was sold by Spanos Barber Jesse & Co. for an undisclosed sum. FirstMed Immediate Care was a standalone practice in Queens.
Summit Medical Group has its own deal making history. The practice dates back to 1919 when it was founded in Summit, New Jersey.
As the 1990s roared along, the practice–then 75 doctors representing 22 specialties and primary care–was swept up in Wall Street’s race to amass publicly traded corporations of doctors. In July 1996, MedPartners Inc. (then NYSE: MDM) paid approximately $55 million in stock valued at $20.75 per share for the group, with 1.2x revenue multiple. At the time Summit was the largest practice group in New Jersey and the metropolitan area.
As a certain generation of healthcare deal makers remembers, the doctor corporations quickly fell apart. In April 1999, Summit Medical Group bought out MedPartners for $20 million (0.43x revenue) and walked away from Wall Street, seemingly never to return. Today it has more than 900 providers at more than 80 locations in New Jersey, multiple ambulatory care campuses and a major cancer center. It handles 1.9 million patient visits annually. And a lot more to come.