Physician medical group M&A activity dropped in the fourth quarter of 2017 to 33 transactions, a 21% decline from the third quarter, according to new acquisition data from HealthCareMandA.com. However, the 33 transactions represented an 18% increase from the fourth quarter of 2016. The first quarter of 2017 represented the highest level of physician medical group M&A activity in several years, with 59 deals. Despite the decrease in deal volume, spending increased 238% in the fourth quarter compared with the previous quarter, to $4.9 billion.
Four companies announced two acquisitions apiece in the quarter: MEDNAX, Epiphany Dermatology, Aurora Diagnostics and Platinum Dermatology Partners. A fifth company, U.S. Dermatology Partners, announced four acquisitions in the quarter. “Dermatology practices dominated the buying in the fourth quarter, many of which are backed by private equity firms,” stated Lisa Phillips, editor of the Health Care M&A Report, which publishes the data. In the fourth quarter, 22 of the 33 acquisitions were made by private equity firms or private equity-backed platforms. “Physician practices, and especially dermatology groups, have been a favorite target for private equity recently,” continued Phillips.
Hospital companies or health systems announced two physician medical group acquisitions in the fourth quarter, and other than dermatology, the second most active sector for acquisition was orthopedic groups, with four practices purchased in the fourth quarter.
All quarterly results are published in The Health Care M&A Report for all 13 sectors of health care, which is part of the HealthCareMandA.com investment research source. For more information, or to order the report, call 800-248-1668.