During the first five months of 2023, the Physician Medical Groups (PMG) sector has seen a large amount of M&A activity. There have been 244 PMG transactions reported, so far, which represents a 6% increase from the first five months of 2022. Considering the economic uncertainty currently plaguing investors, this increase is almost surprising.
Yet, it was not surprising that the most active specialty was dental, with 80 transactions. Compared to the first five months of 2023, when 63 dental transactions were reported, this year’s 80 transactions is even more impressive. The most active acquirer, in the dental and PMG spaces overall, is MB2 Dental Solutions, a portfolio company of Charlesbank Capital Partners, with 27 transactions and many more anticipated to be announced before the end of the quarter.
The second-most active specialty was eye care, with 24 transactions, representing a 43% decrease from the year before when 42 eye care acquisitions were reported. It should be noted that the decrease in eye care M&A activity is one of the few specialties that saw a year-over-year decrease in the PMG industry. That indicates a generally healthy market.
While PMG transactions do not typically disclose purchase prices, spending reached more than $2.207 billion in the first five months across five deals with reported prices. A significant portion of the disclosed spending is due to TPG Capital’s acquisition of OneOncology Inc. for $2.1 billion. Still, this is a large increase from the previous year when more than $1.5 billion was disclosed across three deals with prices.
It would appear that the economic uncertainty impacting the healthcare market has not taken a toll on the PMG market, yet. Or, maybe, it has and some physicians were shaken by the unstable economy and are seizing the moment to sell their businesses. Even if there are willing sellers, buyer appetite has to be there to keep the transactions coming.
