Podiatry, allergy and fertility are specialties that are gaining certain interest and present the opportunity to leverage a first-mover advantage for private equity investment and consolidation, according to experts who spoke on a panel at McGuireWoods 15th Annual Healthcare and Life Sciences Private Equity and Finance Conference on February 21.
Experts included Fritz Buerger, Investment Banking, William Blair; Christian Pesci, Director, Cain Brothers & Company, LLC; Taylor Phelps, Sr. VP, Healthcare Services, Raymond James Investment Banking; Mitchell Stern, Managing Director, Dresner Partners; and Geoffrey Cockrell, Partner, McGuireWoods LLP as the panel moderator.
Here are five key points from the panel discussion.
1. Having remained largely untouched by outside investment and general merger activity, the podiatry, allergy and fertility markets are highly fragmented leaving significant room for consolidation.
2. While the ability to grow outside of major (or urban) markets may present certain challenges, the specialty of fertility, in particular, is one that frequently draws from an expansive patient population and geographic area extending beyond the local market.
3. These specialties yield the potential to encompass a number of ancillary service offerings (such as pharmaceuticals in connection with an allergy practice). Additionally, valuable synergies may be created by adding such specialties as an ancillary service offering to other complementary practices (e.g., the addition of fertility to a women’s health practice).
4. Many of the specialists in these fields are currently doing relatively well to date so a successful strategy will likely emphasize the added value that alignment with a private equity platform brings in terms of management and strategic support (in addition to capital) in this continually changing healthcare environment.
5. Out of the three specialties, fertility appears to be gaining the most attention and traction.