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Why private equity deals will become more common
for orthopedic practices — Key thoughts from
Provident's Robert Aprill
By Laura Dyrda
A
lthough many specialties within
physician services have seen years
of private equity consolidation, PE
firms are now setting their sights on new areas
within physician services. Over the past 18
months, private equity firms have begun in-
vesting in new specialties including orthope-
dics, gastroenterology and women's health.
Most recently, Washington, D.C.-based
OrthoBethesda partnered with Atlantic
Street Capital to grow its business. Provident
Healthcare Partners served as OrthoBethes-
da's exclusive financial advisor in the deal.
Robert Aprill, an associate at Provident
Healthcare Partners, discussed the recent
trend and the role he sees private equity
playing in the healthcare space in the future.
Question: Private equity firms are
beginning to acquire orthopedic
practices and surgery centers at a
higher rate than in the past. Why is
this occurring?
Robert Aprill: is is a big trend and attractive
to orthopedic physicians because it gives them
the ability to grow their business and remain
viable as an independent practice. ey don't
have to sell to a hospital or health system,
which can be a death sentence. Private equity
offers them the ability to consolidate their local
market place and do so with the expertise and
backing of a financial partner while maintain-
ing clinical and medical autonomy.
While private equity's impact on the ortho-
pedic space is only in its infancy, a grow-
ing number of groups have begun to take
interest in how a private equity partner can
benefit their practice. We saw the first wave
of private equity investment into physician
services focused on interventional pain,
ophthalmology, dermatology and dental.
ose areas had a lot of consolidation in
the 2010s. As we consider the 'second wave',
we expect to see new sectors like OB/GYN,
women's health, urology, orthopedics and
gastroenterology to be key specialties private
equity is interested in. I think in the next six
to 18 months, you'll see a number of these
investments as private equity tries to repli-
cate its success in the previously mentioned
'first wave'.
Q: Do you think it will become more
common for orthopedics?
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