The cardiovascular specialty surged in 2022 with 14 announced deals, a significant increase from the year before when four transactions were reported. While the specialty grew a significant amount compared to its past performance, it still only accounts for a small percentage (2.3%) of Physician Medical Groups (PMG) M&A activity.
Several months ago, we discussed why the cardiovascular market is on the rise, revolving around the fact that the American population is aging and facing age-related cardiovascular conditions such as coronary artery disease, atrial fibrillation and heart failure. According to the Centers for Disease Control and Prevention, heart disease is the leading cause of death among men and was the cause of 697,000 deaths in 2020, which shakes out to roughly one person every 34 seconds.
The cardiovascular market is a relatively new market for M&A activity that emerged with the rise of outpatient care. Until recently, cardiovascular care predominantly occurred in hospital settings but as outpatient care capabilities surged, cardiovascular followed suit. This allowed for greater access to the general population seeking cardiac treatments.
In addition, cardiovascular practices offer a range of services such as EKGs, echocardiograms and other regularly performed tests as well as treating more life-threatening heart conditions (such as the ones mentioned above) that require timely care. Treating both areas allows for a wide variety of revenue streams.
With all these factors coalescing, it’s natural that the desire to care for and treat these conditions rises, too as investors have more to gain.
Unlike other specialties that have dozens of large acquirers making moves, the cardiovascular industry is dominated by one large buyer: Cardiovascular Associates of America (CVAUSA).
Formed by Webster Equity Partners, CVAUSA is a physician management services organization headquartered in Orlando, Florida. Through CVAUSA’s physician-centered practice management model, physicians drive clinical care and their practice culture, while benefiting from the business expertise and shared resources available through CVAUSA.
Throughout the course of 2022, CVAUSA purchased six cardiovascular and cardiology practices throughout the United States and added nearly 100 doctors onto its portfolio. The company’s M&A activity has expanded its reach in an impressive and noteworthy way.
Southwest Cardiovascular Associates is a preeminent cardiovascular practice in Arizona that is also active in clinical trials, including the upcoming Integra-D study assessing a device that combines Cardiac Contractility Modulation therapy and a single-chamber defibrillator for patients with heart failure and reduced ejection fraction. The practice has three locations in Arizona and is run by seven doctors.
Heart and Vascular Care was founded more than 15 years ago and has locations in Cumming, Canton, Johns Creek, Alpharetta, Buford, Dawsonville, Ellijay, Jasper and Woodstock, Georgia. It is run by 25 doctors.
Founded more than 25 years ago, Cardiovascular Institute of New England has 13 locations in Rhode Island and is run by 14 cardiologists. Additionally, the practice is affiliated with seven hospitals in Rhode Island.
From observing sleeping patterns to conducting diagnostic testing, Carolina Cardiology Associates’ physicians ensure their patients receive the best possible treatment plan for their heart. The company is headquartered in Rock Hill and has satellite facilities in Fort Mill and Lancaster, South Carolina. It is owned by three doctors.
Chicago Cardiology Institute (CCI) was founded in 2009. CCI is complemented by Chicago Vascular Clinic (CVC), the first outpatient vascular center in Illinois with a stellar track record in advanced vascular procedures performed with great outcomes. CCI & CVC offer the full spectrum of hospital-based, office-based and ambulatory services for patients with heart, vascular and circulatory disorders. CCI has vein and heart clinics located in Schaumburg and Oak Park, Illinois.
The Heart House of New Jersey (HHNJ) is renowned in cardiovascular treatment and advanced care across seven locations throughout Southern New Jersey. It has 30 cardiologists across five locations and is affiliated with eight hospitals in New Jersey.
From these transactions, it is more than apparent that CVAUSA is strategically broadening their presence in areas of the country with a condensed population in addition to areas that attract an older demographic. CVAUSA is taking advantage of the fact that an aging population needs much more cardiovascular care than a younger population.
Moreover, with CVAUSA absorbing practices across the country, the company is adapting the reputation of the already established doctors, lending credibility to their name which will only help them expand more. By carving out a portion of the market for themselves, CVAUSA is establishing themselves in the area and attracting more and more patients, leading to higher profits. The cardiovascular market is yet to be consolidated as other PMG industries have been, so there’s plenty of opportunity for CVAUSA to make a big name for itself.
With more and more transactions being announced and companies looking to consolidate the market further, we’re optimistic that the cardiovascular M&A activity will continue to increase.
