Activity in the Physician Medical Group (PMG) M&A market fell slightly in the first quarter of 2022. In Q1:22, there were 130 publicly announced deals in the PMG sector, according to data from the LevinPro HC Database. This is a 6% decrease from Q4:21 that saw 139 deals. Yet, when compared to Q1:21, this past quarter had 12% more transactions than Q1:21’s 116 deals. Further deal information can be accessed through the LevinPro HC Database here.
“Although the last quarter was not the busiest quarter for investment activity in the physician medical group market, activity remains healthy and stable, with plenty of opportunities remaining for private equity investors. Health systems are also going to make a strong push into the market to bolster their network of care, so expect plenty of future activity,” said Dylan Sammut, Editor of Healthcare at Irving Levin Associates.
Although most deals in the sector do not disclose the transaction prices, there were two deals of note. First, Forefront Dermatology was acquired by Partners Group for $1.5 billion, the largest deal in the sector last quarter. Founded in 1977, Forefront Dermatology is a network of dermatology practices providing best-in-class general, surgical and cosmetic dermatology care along with related laboratory services. The disclosed deal value for all of Q1:22 totaled $1,500,756,332. In Q4:21, the disclosed transaction value totaled more than $2.9 billion across six publicly priced deals which is higher than last quarter by more than $1 billion. Q1:22 total dollars volume was higher than Q1:21, which only saw $489.2 million in announced spending across three different deals.
After analyzing the 130 deals that were reported last quarter, 26 deals targeted dental practices and 23 focused on ophthalmology practices. Dental and ophthalmology practices are traditionally attractive targets for private equity firms, and we expect this trend to continue. Q1:21 reported 20 ophthalmology deals and only 15 dental transactions. Another popular sector for Q1:21 was gastroenterology that saw 18 deals, which is more than a 33% decrease to Q1:22 that only had 12 gastroenterology deals. Read more.
