Gary Herschman Quoted in “Doc Group Deals Take Health Care in New Directions”

Health Care M&A

Gary W. Herschman, Member of the Firm in the Health Care & Life Sciences practice, in the firm’s Newark office, was quoted in Health Care M&A, in “Doc Group Deals Take Health Care in New Directions,” by Lisa Phillips.

Following is an excerpt:

With more than 180 deals announced so far in 2019, the Physician Medical Group sector is roaring toward another strong close. The usual specialties—dental, dermatology and ophthalmology—are still very active, but after 10 to 20 years of consolidation, their trajectories are flattening. …

The hot areas this year have been surgical subspecialties, according to Gary Herschman, a member of Epstein Becker Green’s Health Care and Life Sciences practice and its Board of Directors. “GI, ortho, urology are the areas where we have the most work going on,” he said recently. “We’ve seen a pick-up in OB/GYN-women’s health deals. That area is getting hot, in general.”

Private equity investors are looking for growth and one way to get it is to add on ancillary services that add value, he said. “Ortho is my favorite. They can have physical therapy, durable medical equipment, urgent care, lab services. The same is true with GI practices that have pathology labs, ambulatory surgery centers, infusion therapy and more. All of those services add value.” …

Looking ahead, EBG’s Herschman sees deal volume continuing to rise for the next year or two. “Eventually multiples will come down from where they are now. Small practices are going for 5x to 8x or 9x now and the larger ones (40 to 50 physicians) are getting 9x to 15x. I don’t know how long that’s sustainable,” he said.