Advisory Resources For Physicians

Map of Private Equity's Dermatology Acquisition Activity Across the United States

Posted by Eric J. Yetter on Mar 26, 2019 12:14:06 AM
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If you have been paying attention to events in the dermatology world, you are well aware of  private equity's increasing interest in dermatology practices and surgery centers across the United States. The details of individual acquisitions are frequently announced. But what does the big picture look like? 

The team at PhysiciansFirst Healthcare Partners conducted extensive research to understand where these investors are acquiring and what this consolidation wave looks like across the nation.

the map

The map below depicts the development status of the private equity/dermatology consolidation that began with one private equity firm’s pioneering investment in 2011. Today there are twenty seven private equity firms actively investing in dermatology practices with varying strategies and geographic target areas.

Heat Map for State of Derm White Paper

The colors on the map illustrate the current level of acquisition concentration in each state as measured by the number of private equity-owned locations. Activity has been heaviest in several states, where certain or multiple firms have grown aggressively. Otherwise, this consolidation wave generally tracks population density with some notable exceptions like Kentucky, South Carolina, and Utah.

looking forward

PhysiciansFirst expects heavy acquisition activity throughout these markets in 2019, with new entrants likely in some undeveloped areas. 

This is a market with vast potential. PhysiciansFirst believes that dermatology practices are less than eight percent consolidated, an assumption backed by data from Bain & Co. Excellent supply and demand fundamentals, an abundance of cash, new geographies, and dermatology’s relative independence from the hospital suggest that private equity will remain interested. 

Today’s higher risks and costs of practicing medicine, compelling financial components, and a more physician-friendly model have dermatologists’ attention as well. For those reasons, we expect many more transaction announcements this year.

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This article is an excerpt from our New, Comprehensive 40-Page White Paper: The Physician Seller's Guide to Private Equity Firms Investing in Dermatology.

This White Paper contains:

  • A thorough analysis of platform growth and market development
  • A guide to private equity's platform management company structure
  • Maps of consolidation saturation across the United States
  • A comprehensive profile of each of the 27 firms actively investing in dermatology, including their regional presence and practice partnerships
  • Our four key expectations for future development

Click the link below to download a copy now.

Request Copy

 
CONTACT PHYSICIANSFIRST HEALTHCARE PARTNERS

Want to learn more? Contact our Leadership at PhysiciansFirst Healthcare Partners, read our blog or listen to our podcasts for more information about practice and surgery center acquisitions. We’re one of the few investment banks devoted entirely to physicians. 

PERSONALIZED VALUATION CONSULTATION

Physicians interested in understanding what elements drive private equity transaction prices and seeking a shorthand estimate of what buyers are likely to offer for their practice and post-sale preferences should contact me directly with no obligation. See contact info below.

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nullEric Yetter is Managing Partner at PhysiciansFirst Healthcare Partners - a boutique investment bank focused on physician-owned assets. He can be reached at (615) 647-6805 or via e-mail at eyetter@physiciansfirst.com.

Topics: Private Equity, Physician Practice Mergers and Acquisitions, Dermatology