A comprehensive view of ophthalmology's recovery from the pandemic shutdown. We review changes in elective surgery, the emerging investor interest in retina practices, private equity acquisition activity, geographic development, and changes to acquisition practice size. As the COVID-19 fog begins to clear, we see significant near-term promise and a potential return to record deal levels.
After seven strong years, private equity investment in dermatology has been in decline since 2019. Now, elective procedure bans and shelter-in-place orders have practice owners wondering if the opportunity to sell has passed. This paper examines the differing views on pe-backed consolidation, key performance indicators, investor activity, and saturation by geography and practice size. We see several positive factors for our current and potential clients within a coming private equity player restructuring.
Eight years of consolidation activity has resulted in a wide spread of PE-backed practices across the United States.
Two key factors provide a view of current and future consolidation speed.
The number of private equity firms investing in gastroenterology practices and surgery centers doubled in 2019. As of the end of 2019, six PE firms were actively investing in the space with three new firms entering in the last three quarters of 2019.
As of the end of 2019, there were 25 private equity firms actively investing in ophthalmology practices and surgery centers. It is among the most active physician practice consolidations currently taking place in the United States.
Our recently published white paper examined all core aspects of private equity's investment in ophthalmology practices and surgery centers from 2012 – 2019.
Is gastroenterology the next darling of private equity? Large GI practice acquisitions exploded in 2019, tripling that of the prior three years. Expansion to new geographic areas doubled in each of the last three quarters of 2019. We see this activity accelerating in 2020 when a significant number of new private equity investors enter the market and physician sellers see high demand for their practices.
Private equity investment in ophthalmology practices has been one of the "hottest" sectors in M&A over the last several years. We believe the market will continue to be strong but our key indicators now signal a transition to Network Growth in 2020 – a more mature phase characterized by consistent add-on acquisitions. There are still open geographies with great opportunity, such as Texas and multiple areas on the West Coast. We project increased deal activity in these areas including large platform acquisitions.
Private equity investment in orthopedic practices is in the early pioneering stage. Twelve private equity firms have participated in major orthopedic and spine practice investments … 6 as LEAD investors and 6 as participating investors. We examine the six lead investors to understand their investment strategy, current geographic footprint, and growth prospects. We also discuss the five issues we believe will drive the future growth of private equity investment in orthopedics.
Securities transactions conducted by FOCUS Securities LLC, an affiliated company, registered broker-dealer and member FINRA/SIPC © 2024 FOCUS Investment Banking LLC
Securities transactions conducted by FOCUS Securities LLC, an affiliated company, registered broker-dealer and member FINRA/SIPC
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