Anjana D. Patel, a Member of the Firm in the Health Care and Life Sciences and Litigation practices, in firm’s the Newark and New York offices, co-authored an article in Healio, titled “How to Look at Private Equity Investment in Physician Groups: Eye Care.” (Read the full version - subscription required.)

Following is an excerpt:

The eye care sector saw a significant uptick in investment and consolidation activity in the first half of 2017. Private equity capital flowed into the sector to the tune of seven new platform investments in the first 180 days of 2017. The investment thesis in the sector is predicated on procedural volume tailwinds because of an aging population, cash-based premium eye care service offerings and a highly fragmented landscape ripe for consolidation.

In May 2014, Varsity Healthcare Partners, a health care-focused private equity firm with a demonstrated record of success in other outpatient specialties, recapitalized Katzen Eye Group to form Eyecare Service Partners (ESP) in a transaction that represented one of the first recapitalizations of an ophthalmology practice. With the capital and resources that Varsity provided, ESP expanded into four new states and grew its provider base from 30 to more than 115 in a 3-year span. ESP leveraged its first-mover advantage in implementing an aggressive add-on acquisition strategy to expand its geographic reach from Maryland to Delaware, Colorado, California and Illinois.

Private equity investment was quiet for a period after the Katzen transaction, until a number of other investor groups began to develop a similar thesis and enter the sector. Midway through 2015, FFL Partners recapitalized Clarkson Eyecare, a St. Louis-based optometry practice, to form EyeCare Partners (ECP). ECP, alongside ESP, has been an active consolidator in the eye care space, acquiring both optometry and ophthalmology practices nationwide.

Jump to Page

Privacy Preference Center

When you visit any website, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences or your device and is mostly used to make the site work as you expect it to. The information does not usually directly identify you, but it can give you a more personalized web experience. Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer.

Strictly Necessary Cookies

These cookies are necessary for the website to function and cannot be switched off in our systems. They are usually only set in response to actions made by you which amount to a request for services, such as setting your privacy preferences, logging in or filling in forms. You can set your browser to block or alert you about these cookies, but some parts of the site will not then work. These cookies do not store any personally identifiable information.

Performance Cookies

These cookies allow us to count visits and traffic sources so we can measure and improve the performance of our site. They help us to know which pages are the most and least popular and see how visitors move around the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies we will not know when you have visited our site, and will not be able to monitor its performance.