One of the largest gastrointestinal physician groups has been sold to a Canadian private equity firm. OMERS Private Equity, based in Toronto, has purchased Gastro Health, LLC from Audax Private Equity. No terms were disclosed. Gastro Health is a medical group specializing in the treatment of gastrointestinal disorders, nutrition and digestive health. The group has more than 250 physicians with locations in Alabama, Florida, Maryland, Ohio, Virginia and Washington.
Audax Private Equity has sponsored Gastro Health since it acquired them in 2016, and the partnership has produced nearly 20 transactions, including two this year. In March, the physician group purchased Digestive Disease Associates (15 physicians), the leading gastroenterology practice with two state-of-the-art locations in Baltimore and Columbia, both of which also include attached endoscopy centers. The company also provides pathology, infusion and anesthesia services in-house.
In February, Gastro Health added the practice of Caren Bennett, MD, who specializes in esophageal and gastrointestinal disorders. Her practice is affiliated with Memorial Regional Hospital and Broward Specialty Surgery Center.
Physician groups specializing in gastrointestinal treatment are popular targets for investors, accounting for nearly 13% of the 163 deals in the Physician Medical Group sector announced this year. In one of the largest deals in the sector, CRH Medical Corporation, which provides physicians with innovative services and products for the treatment of gastrointestinal diseases, was purchased for $292.7 million by WELL Health Technologies (TSX.V: WELL). Demand for these groups is high, and we expect to see that continue throughout the year.
The transaction with OMERS is expected to close in the second quarter of 2021. Moelis & Company served as financial advisor for Gastro Health.
