Advisory Resources For Physicians

Private Equity in Dermatology - Four Key Predictions for 2019

Posted by Eric J. Yetter on Mar 28, 2019 4:34:54 PM
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PhysiciansFirst expects several key developments in 2019. Most importantly, we anticipate increased acquisition momentum – both from new entrants and existing companies as they grow and enter new geographies. At the same time, some of the current investor pool will merge. Companies that have been unable to grow at their desired pace will likely combine with larger, more successful enterprises.

We also expect increased opportunities for small practices including single dermatologists in new geographies.

Our Four Key Predictions for Calendar year 2019

1. Multiple New Entrants Will Acquire Initial Platforms

Well-capitalized private equity firms with excellent healthcare track records are waiting for the right opportunity to enter this market. We believe both generalists like FFL Partners and healthcare-focused firms like Water Street are ideally situated for an investment in Dermatology. Time will tell if, and when, these investors make their first move.

2. Existing Companies Will Acquire Platforms in New Geographies

Physicians thinking about the current private equity landscape should be careful not to consider it geographically-bound. For example, a company that is active in the Mid-Atlantic could acquire a platform practice in Utah tomorrow and launch major growth initiatives in the West. PhysiciansFirst expects to see multiple moves of this kind going forward.

3. Platforms Will Seek Growth Through Acquisition in Surrounding Areas, Further Expanding Opportunity for Small and Medium Practices

All private equity-backed dermatology investors need to grow organically and through acquisition, and they will seek partnership with small and medium practices at an increasing rate. While a small practice in Montana may have limited opportunities today, that will change as the Western United States sees further PE investment activity. We are already seeing intense competition for small and medium practices in most of the United States.

4. Companies Will Merge

As private equity-backed companies start to have a longer operating history, their actual performance will be compared to investors’ expectations. Those that are not growing quickly enough will merge into their more successful peers. We will also see situations where both companies are doing well and a combination simply creates increased, mutual success.

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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