LevinPro HC
“Despite rising labor costs and interest rates, investment activity in physician groups remains strong, especially from private equity buyers and their platforms. A highly fragmented physician market and steady cash flows seem to be enough for investors to push through tough economic conditions.”
NEW CANAAN, Conn. (PRWEB)
July 18, 2023
M&A activity in the Physician Medical Group (PMG) sector increased in Q2:23, reaching a total of 148 transactions, according to data captured in the LevinPro HC database and published by Irving Levin Associates, LLC. Activity in Q2:23 marks a 6% increase from Q1:23 when 139 acquisitions were reported but matches data from Q2:22 when 147 deals were announced.
Private equity firms and their sponsored platforms remain the most active investors in the market, accounting for 62% of all announced transactions. PE firms targeted dental practices in more than a third of the transactions, making them the hottest vertical in the physician market, followed by eyecare providers. MB2 Dental Solutions, a portfolio company of Charlesbank Capital Partners, played an outsized role in the deal volume, announcing 22 transactions in Q2 alone. The PE-backed company is one of the leading dental services organizations in the country and has been one of the major players in the market for the past several years.
The largest physician deal, by disclosed price at least, was the acquisition of OneOncology Inc. by TPG Capital and AmerisourceBergen valued at $2.1 billion. AmerisourceBergen is only a minority investor in this transaction, buying a 35% ownership stake valued at $685 million in cash.
“Despite rising labor costs and interest rates, investment activity in physician groups remains strong, especially from private equity buyers and their platforms” stated Dylan Sammut, Editor of Healthcare at Irving Levin Associates, LLC. “A highly fragmented physician market and steady cash flows seem to be enough for investors to push through tough economic conditions.”
Health systems were also in the market for physician groups, announcing 10 acquisitions to expand their outpatient care networks. Practices focused on women’s health were a major draw for large health systems like Augusta Health and Mercy Iowa City, primarily driven by demographic trends, expanded coverage from insurance providers and new social-cultural dynamics in the country.
“Dental and eyecare practices have always seen high investor demand, but keep an eye out for previously overlooked verticals, such as women’s health providers and OB/GYN clinics,” continued Sammut. “That’s a very fragmented market and demand is outpacing the supply of clinicians. Investors would be smart to capitalize on these new tailwinds.”
All quarterly results are published in The Health Care M&A Report, which is part of LevinPro HC, a research intelligence platform published by Irving Levin Associates, LLC. For information, or to order the reports, call 800-248-1668. Irving Levin Associates is celebrating more than 70 years of delivering exclusive M&A intelligence to its sophisticated audience of seniors housing and healthcare investors. The company was established in 1948 and has offices in New Canaan, Connecticut and North Bethesda, Maryland. The company publishes research reports and newsletters and maintains databases on the healthcare and senior housing M&A markets.
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