ASC is attracting private equity investment in many markets — here are five key notes on PE and ASCs in 2023:
1. Private equity looked to cardiology, the fastest-growing ASC specialty, in 2023. Earlier this year, Florida-based private equity firm Viper Partners opened a mergers and acquisitions department focused on cardiology deals.
Additionally, in the last year, Orlando, Fla.-based, private equity-backed Cardiovascular Associates of America added Daytona (Fla.) Heart Group, Brandon, Fla.-based Bay Area Cardiology and Neptune, N.J.-based Shore Heart Group to its physician alliance.
2. Private equity also doubled down its interest in orthopedics. Private equity deals for orthopedics-focused ASCs have increased in the last five years, and orthopedics has been one of the most active targets for private equity. The highly fragmented industry has potential for standardization and value-based care, according to a report from VMG Health.
3. Private equity is also looking to ASC management service organizations. New Nashville, Tenn.-based SurgNet Health Partners secured a relationship with three private equity firms in December 2022 and acquired two ASCs in 2023. Additionally, Elgin, Ill.-based DxTx Pain and Spine secured a $50 million private equity investment from international firm BC Partners Credit.
4. Some ASC leaders believe that independent ASCs could be the next private equity target. Inflationary pressure has turned private equity investors towards smaller deals, where financing might be easier, or eyeing add-ons small enough to purchase without debt. VMG Health believes private equity strategy shifts could drive transactions among independently owned ASCs.
5. In May, private equity-backed physician services company and ASC operator Envision filed Chapter 11 bankruptcy. AmSurg has since purchased all surgery centers held by Envision.