Area of expertise
Healthcare Services
Sell-side M&A and capital raising for independent physician practices, specialty groups and outpatient providers.
Coverage
What we cover
Our typical client is an independent practice with $10 million or more of revenue, which usually means $1 million or more of EBITDA.
Sector leadChris Gammill
- Physician practice management and specialty groups, including ophthalmology, retina, pain management and neurology
- Dental and orthodontic groups
- Ambulatory surgery centers
- Physical therapy and rehabilitation clinics
- Urgent care and primary care
- Imaging and laboratory services
- Infusion and specialty pharmacy
The market
Why buyers are active
Provider services remain highly fragmented, and a growing range of procedures can now be performed in an outpatient setting. Both trends keep acquirers active.
Private equity sponsors and private-equity-backed strategic acquirers are the most active buyers today. Hospital systems compete as buyers in certain markets.
Valuation
What moves value
Buyers pay a premium for
- Scale, measured by the number of providers
- An affiliated or owned ambulatory surgery center
- A higher share of commercial payer volume
What hurts valuation
- Revenue concentration
- Associate physicians who may not stay after a sale
Deal considerations
What we navigate
Keeping physicians aligned
Selling partners typically sign multi-year employment agreements and roll equity into the transaction, which keeps them aligned with the buyer. Associate physicians are negotiated with directly, and partners often offer them retention bonuses to stay.
Corporate practice of medicine
Corporate-practice-of-medicine and MSO rules vary by state and are worked through with deal counsel. Some buyers will not acquire in states with strict restrictions, such as California and Oregon, which shapes the buyer list.
More than the number of offices
Specialty, provider count and location matter more to buyers than whether a practice is multi-site. Some very small practices operate several offices.
Experience
Representative transactions
- Solinsky EyeCareStrategic affiliation with ReFocus Eye Health
- SEPA Pain & SpinePartnership with DxTx Pain and Spine
- Neurology Group of Bergen CountyPartnership with Privia Health
- Montana Retina ConsultantsSale to Retina Consultants of America
Transactions advised on by Alexander Price & Co. bankers, including at prior firms.
Preparing for a sale
What to do 12 to 24 months ahead
An early conversation costs nothing and often adds value at sale. See how a sale process works →
- Log and track add-backs and adjustments to earnings as they happen, not when a buyer asks.
- Talk to a financial planner or wealth manager about tax planning well before a sale.
- Keep your foot on the gas. Sustained profitability through the process protects value.
- Get organized: corporate documents, payer contracts, employee contracts, insurance policies and vendor agreements.
Other areas of expertise
Considering a transaction?
A confidential conversation with a senior banker is the best place to start.