Private Equity Investment in Pediatrics Practices
Overview:
The U.S. healthcare sector has undergone significant growth and consolidation due to regulatory efforts, market forces, and structural changes. While private equity historically focused on specialty providers like urology, ophthalmology, or dermatology, recent years have seen a shift towards other physician practice management (PPM) specialties, including pediatrics. Private equity groups recognize the value creation potential in pediatrics through internal referrals, ancillary services, and the consolidation of multiple specialties within a single network. This approach allows for self-governance preservation while achieving economies of scale, leading to stronger bargaining power with payors and suppliers.
Market Landscape:
In 2023, there are three private equity-backed platforms in the pediatrics specialty, with Pediatric Affiliates (backed by Webster Equity Partners) formed in 2023, and Pediatric Associates (backed by Summit Partners) formed in 2019. Physician Growth Partners led the creation of Pediatric Affiliates, marking the first PE-backed pediatric platform in the northeastern United States.
At Olympic M&A, we specialize in guiding healthcare providers through the private equity process, ensuring long-term success for our clients. Our focus areas include:
- Financial Modeling: Developing customized financial models to optimize cash flow and credit, supporting ongoing growth initiatives.
- Buyer Mix Strategy: Identifying the right mix of potential buyers, including strategic acquirers and private equity groups, and implementing a strategy to engage them effectively.
- Buyer Marketing and Negotiation: Managing buyer engagement, from marketing and bid solicitation to negotiation, to secure favorable terms for our clients.
- Client Positioning: Positioning our clients to attract relevant potential buyers with strong offers that address cultural fit, strategy, and alignment.
- Transaction Management: Overseeing the entire transaction process, maximizing leverage with potential buyers to achieve optimal outcomes.
- Deal Negotiation: Leveraging our experience within the healthcare sector, negotiating key economic and structural deal terms to ensure favorable results.
- Due Diligence Facilitation: Facilitating due diligence processes seamlessly, ensuring a smooth transition to closing without disrupting day-to-day operations.
- Maximizing Financial Results: Maximizing financial results for shareholders while maintaining clinical autonomy is our priority.
With our expertise and focused approach, we empower pediatric practices to navigate the complexities of private equity investment successfully, ensuring a seamless and mutually beneficial transaction.
