physician services transactions
Market Dynamics Lead to Increased Hospital-based Physician M&A
Colorado Attorney General Strikes Agreement Impacting Anesthesia Partners
In a significant development within the physician practice groups industry, Colorado’s attorney general has announced an impactful agreement with Anesthesia Partners of Colorado, Inc. (USAP), affecting contracts with five hospitals in the state, including the Denver and Durango markets.
Implications for Middle Market Practices
While initial concerns may arise regarding financial partnerships, this agreement presents unexpected opportunities for middle market and lower middle market practices. However, we think this development may influence growth or exit strategies within the industry.
New Opportunities in Contract Management
Hospital systems are shifting towards smaller independent physician groups for contract management in areas like anesthesia, emergency, and radiology departments. The new contract growth should result in a fundamental increase in the valuation of the independent groups.
Attracting Strategic Players and Investors
The potential for new contracts is likely to attract interest from strategic players and private equity investors in the healthcare M&A landscape
Navigating Antitrust Scrutiny
Antitrust scrutiny may impact smaller lower middle market targets, but they may now be seen as potential platform investments.
Maximizing Potential Upside
Owners of platform targets could see significant potential upside as first roll-over equity in the capital structure of “newco”.