Stephen M. Monroe, Partner
Phone: (800) 248-1668
Fax: (203) 846-8300
Record-Breaking Year for Acquisitions of Physician Medical Groups According to Irving Levin Associates, Inc.
(April 8, 1997-New Canaan, Connecticut) Irving Levin Associates, Inc. has just released the preliminary findings of its publication, The Physician Medical Group Acquisition Report, Second Edition, 1997. The Report details 242 publicly announced transactions relating to the merger or acquisition of physician medical groups. This record-breaking volume was up 92% from the 126 deals announced in 1995.
These 242 transactions targeted over 295 practices, physician practice management companies (PPMs), independent practice associations (IPAs) and management service organizations (MSOs). As a result, these deals affected a combined total of more than 19,950 physicians, up an astounding 122% from the 9,000 reported in 1995.
“The physician practice management industry has come into its own as reflected in the level of mergers, acquisitions and IPOs,” stated Stephen Monroe, a partner at Irving Levin Associates. “In fact, this sector has surpassed the hospital sector, once the most robust acquirer, in the number of deals undertaken in the health care services industry.” Moreover, the enthusiastic activity has been infectious, inspiring the recent surge in mergers, acquisitions and IPOs in the dental practice management sector.
The acquirers include hospitals, other medical practices and even long-term care providers, but the PPM—the physician practice management company—dominates the merger and acquisition market. With over 35 PPMs, many of them publicly traded companies, further medical practices will be targeted during 1997 and beyond. The targeted practices include primary care, single specialty and multispecialty practices, running the entire gamut of surgical and medical specialties.
“Recent market turbulence notwithstanding,” continued Mr. Monroe, “we expect this consolidation activity to continue near the levels set in 1996.” As with the rest of health care services, the physician medical group sector remains highly fragmented; individual practices are increasingly susceptible to economic pressures and vulnerable to the demands of managed care groups. Even if the equity market loses some steam, these factors will ensure the ongoing consolidation of practices through mergers and acquisitions.
Further, many physicians perceive the PPM as a needed counterbalance to managed care groups such as HMOs. “The success of the PPM rests on its ability to return to physicians control of their economic and medical future by building on their entrepreneurial spirit,” Mr. Monroe noted.
Irving Levin Associates, Inc. is a New Canaan, Connecticut-based financial services firm specializing in health care investments. The Firm has nearly 50 years experience in the health care acquisition market. To keep abreast of this rapidly evolving market and obtain valuable information and statistics to assist you in your business and investment decisions, you may order a copy of The Physician Medical Group Acquisition Report, Second Edition, 1997 by calling (800) 248-1668.
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