What is a PE sponsor trying to achieve when they partner with a physician practice?





PE sponsors have recognized that investments in physician practices can yield strong returns on investments. PE sponsors typically partner with physician practices by taking a majority or minority ownership stake in the physician practice and are typically looking to:

Partner with a stand-alone practice that has a functional central business office (known as a platform company).

Pursue “add-on” acquisitions by acquiring similar, smaller practices in the same region as their initial platform investment.

Implement best practices across the businesses, optimize revenue cycle, and institute a business development function.

Build a network of several practices that are about two to three times the size of their initial acquisition. After a three- to-five-year hold period, they will look to sell all or a portion of this larger, more operationally efficient group of practices to a larger private equity fund or strategic operator.

Download PDF: Physician practice M&A

Physician practice M&A
Physician practices are frequently being approached by private equity firms. This bring about many questions for practices owners regarding what’s next for their practice and how to maximize value as they prepare.

How we can help?

KPMG Corporate Finance LLC’s healthcare services investment banking team understands that the decision to pursue a strategic partnership is a significant decision. We guide physician practice stakeholders through each step of the process, from deciding whether to pursue a partnership, and understanding the value drivers to executing a transaction.

We’re able to answer questions and provide you with objective insights on how to efficiently execute a deal that aligns with your goals and objectives.We understand the healthcarelandscape and how to differentiate your practice. We offer actionable insights and guidance while managing the transaction from start to finish. Our decades of transaction experience allow us to navigate complex transactions, our pulse on the dynamics within the healthcare industry help us maximize value, and our relationships with private equity sponsors and strategic buyers are critical for getting your practice in front of more interested parties.

If you would like to begin a discussion around what your options for a strategic partnership could look like, and to better understand how to maximize value during the process, please contact a member of our team.