One question that physician owners often have is how private equity investors will further optimize the practices that they have spent years building. In episode 18.11, we reference our advisory resources article titled, “Ophthalmology From Private Equity’s Perspective, Rationale, Risk And Reward” to look at this question from PE’s perspective and explain how private equity makes money off of their investments.

One question that physician owners often have is how private equity investors will further optimize the practices that they have spent years building. In episode 18.11, we reference our advisory resources article titled, “Ophthalmology From Private Equity’s Perspective, Rationale, Risk And Reward” to look at this question from PE’s perspective and explain how private equity makes money off of their investments.

In this episode of PF Insights, we discuss the key differences in consolidation and acquisition of health care practices in the 1990s compared to the current state of PE backed consolidations and acquisitions. We look at key similarities and differences of the acquisition time periods and focus on the fundamental change that has made acquisition models more successful for both physicians and buyers.

The bottom line on this one is, you get more value from an investment banker than the amount of money you pay in fees. That's been our experience and it has been confirmed in independent studies on the issue.

We've lived this many times but this is new territory for our clients. Of course they should ask this core question before they move forward. In this podcast we do our best to communicate the real issues you will be facing and how an investment banker will be an important and trusted guide to help you reach your goals

I could do this myself ... what benefits make an investment bank worth the cost? 0:00 - 10:40
The best have been shown to deliver higher offers that more than pay for their fees
They invest extensive amounts of time to secure a successful transaction
They handle unforeseen obstacles that will occur in due diligence with experience and professionalism
They help facilitate disagreements between partners that often occur during the process
How long does the transaction process take and what are the key steps? 10:41 - 18:00
Conservative a year .. can be 6 - 12 months depending on physician engagement
From start to finish ... an overview of our systematic process

This is an area of major interest because it is totally new territory for our clients and it can be both overwhelming and intimidating. New terminology, a multitude of cash and equity structures, private equity companies and global ophthalmology platform operating companies.

We bring experience and understanding to this complex issue so our clients can evaluate their options and find the best solution for their situation and goals.

What are the typical cash/equity structures in a private equity transaction? 0:50 - 9:20
A review of: 1) 100% cash purchase, 2) Cash plus minority retained equity in the practice, 3) Cash plus global platform operating company equity.
What is the difference between the private equity company and the global ophthalmology platform operating company? I get confused by multiple names. 9:21 - 11:44
Should I seek more cash or more equity in the deal structure? 11:45 - 15:47
Understanding global ophthalmology platform company recapitalization risk and reward
What other types of investors may be interested in investing in my practice? 15:48 - 18:53

This episode of PF Insights kicks off our Crucial Questions series - a five-part series aimed at answering the most common questions we receive from potential physician clients regarding ophthalmology practice acquisition. We start with our most common first question, "Is my practice a candidate for acquisition?"

Behind that question, our physician clients have related beliefs or assumptions that we address with the market's reality.

How many physicians are required in a practice in order to be considered an attractive candidate for acquisition? 0:59 - 5:34
The market has opened up for almost all practice sizes
What exactly are private equity investors buying? 5:35 - 8:25
EBITDA and the physician-owner as an employed physician
What about the real estate? 8:26 - 11:30
Post-sale real estate options and requirements

This episode wraps up our three-part series and focuses on Culture; an extremely important transaction issue to both buyers and sellers. We discuss the new partnership approach and the many ways that a private equity transaction can be very positive for physician-owners of all ages and practice size.

We also discuss why orthopedics and spine will soon become a hot vertical.


How business-side and clinical-side culture is affected by a private equity acquisition 1:05 - 5:44
No longer limiting physician choice and dictating the supply chain
Embracing a positive culture, practice growth and new equipment purchase
What vertical is next? Early stage interest in top orthopedic and spine practices 6:10 - 9:47
Principally spine care from orthopedic surgeons and neurosugeons
Favorable supply and demand scenario and global migration towards lower cost ambulatory care
Why private equity transactions work for young physicians 9:48 - 13:17
Practice growth and partnership buy-in mechanisms bring new and attractive opportunities for associate physicians

This episode continues our three-part series on the outlook for private equity interest in 2018. We look at where things have been, where they are today, and where it is all going.

Importantly, we begin to focus on the fundamentals and the concerns. We drill-down into today's selling opportunity and discuss the value of investment bankers centered around two common question from physician-owners ... "When is the best time to sell?" and "How will my life change after the transaction?"

PE trends and what they mean for small and medium sized practices 1:20 - 3:51
Explanation of 'multiples', EBITDA, and compensation 3:51 - 7:25
Drilling-down on today's selling opportunity and "the best time to sell" 7:26 - 10:45
Talking through common physician concerns 11:10 - 15:58
The value of using investment bankers and focusing on "The Complete Deal" 15:59 - 22:42

The first PF Insights episode will kickoff our series on what physician owners can expect from private equity in 2018. In this episode, we will offer a brief history of PhysiciansFirst as well as an overview of private equity's emerging interest in ophthalmology. We discuss the positive differences of today's buyers versus those of the 1990's and break down interest and activity by regions and by practice size.

Meet Andy and Eric 1:00 - 4:00
History of PhysiciansFirst Healthcare Partners 4:00 - 5:22
Explanation of explosion of M&A in Ophthalmology in 2017 5:22 - 8:25
Untouched regional transaction activity and development 8:50 - 10:25
Areas of opportunity for small and single physician practices 10:26 - 13:35
Importance of profitability 13:36 - 15:07
The critical and positive differences of today's investor goals versus the 1990's 15:08 - 20:46