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GASTROENTEROLOGY
4 trends to know about private equity in gastroenterology —
Multiples, market potential & more
By Rachel Popa
A
high level of gastroenterology private equity activ-
ity will continue in 2019, according to Kerri Zel-
ensek, McGuireWoods associate, and Tom Zahn,
partner at McGuireWoods. Mr. Zahn and Ms. Zelensek
attended the 6th Annual Healthcare and Life Sciences Pri-
vate Equity and Finance Conference, February 20 and 21
in Chicago, and outlined the key takeaways on JDSupra.
The key trends to know:
1. Gastroenterology is a fragmented market, which may
impact private equity opportunities. Gastroenterologists
are accustomed to working independently, making com-
binations and add-ons challenging.
2. Gastroenterology multiples vary due to differences in
infrastructure and practice sophistication. Multiples will
likely be lower for add-in deals and for practices without
an established infrastructure. Conference panelists said
they've seen multiples in the low teens or high single
digits for practices with a strong internal structure.
3. Commercializing gastroenterology ancillaries is key.
Structured ancillaries can form lucrative investments and
benefit physicians' practices.
4. Before a practice comes to market, there should be an
agreed-upon, transparent formula for physician compen-
sation. n
Structured ancillaries can form
lucrative investments and
benefit physicians' practices.
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