Download 2015 Year-End Dermatology Update

2015 Year-End Dermatology Update
Provident Announces Dermatology Transaction
M&A Overview
Dermatology consolidation in 2015 was dominated by private equity
investments within the sector. With macroeconomic trends indicating
strong future demand for services amidst a shortage of dermatology
providers, private equity groups have sought to provide capital resources
and industry relationships to an existing practice platform in order to
rapidly capture market share. Given the shortage of platform caliber
providers in the market amidst the strong acquisition interest, private
equity groups have typically gone below their typical investment size,
aggregated several practices into one unified platform, or approached
other private equity-backed practices for an acquisition. This strong
demand has generated premium valuations for practices. Looking into
2016, Provident expects several of the current private equity sponsors in
dermatology to exit their investments in order to capitalize on the
favorable valuation environment. This will almost certainly create a
trickle down effect for privately held providers, as consolidators with
fresh resources seek add-on acquisitions and new private equity groups
have better visibility on short term exit opportunities.
The Dermatology Center has been
recapitalized by Pharos Capital
Group. With four locations and 15
clinicians, The Dermatology Center
plans to geographically expand its
footprint throughout the MidAtlantic by utilizing the capital
resources of Pharos to open new
sites and make acquisitions of
regional providers.
Has been recapitalized by
Provident Healthcare Partners served as the exclusive advisor to
The Dermatology Center through this transaction process. “We
are very excited about the new partnership created by The
Dermatology Center and Pharos Capital Group, which will allow
The Dermatology Center to continue to expand its operations
while remaining a superior provider of comprehensive
dermatology services,” commented Justin Hand, Managing
Director at Provident Healthcare Partners.
Select Transactions
Month
Acquirer
Target
Company
Details
December
2015
Pouschine Cook
Capital Management
& Yukon Partners
Golden State
Dermatology
Pouschine Cook Capital Partners, in partnership with Yukon Partners, has made an
investment in Walnut Creek Skin and Laser to form Golden State Dermatology.
Golden State Dermatology will leverage Walnut Creek’s existing platform, combined
with its new partners’ capital, for future expansion.
November
2015
Forefront
Dermatology
(Varsity Healthcare
Partners)
Premier
Dermatology
Premier Dermatology, a leading dermatology practice in Illinois, has been acquired by
Forefront Dermatology, a portfolio company of Varsity Healthcare Partners. The
acquisition will add six additional clinics to Forefront’s operations and a platform for
further expansion within the state.
October
2015
Dermatology
Associates
(Candescent Partners)
Lone Star
Dermatology
Dermatology Associates has acquired Lone Star Dermatology. The transaction will
expand the group’s footprint in central Texas to include five clinicians.
United Skin
Specialists
Tonka Bay Equity Partners has completed an investment in United Skin Specialists.
United Skin Specialists, based in Minnesota, provides practice management services
to dermatology offices in the Midwest. The deal is Tonka Bay’s fourth platform
investment in the practice management industry and first investment into the
dermatology sector.
September
2015
Tonka Bay Equity
Partners
September
2015
Advanced
Dermatology &
Cosmetic Surgery
June
2015
New MainStream
Capital
January
2015
SV Life Sciences
Provident Healthcare Partners
Dermatology of
Advanced Dermatology & Cosmetic Surgery has acquired Dermatology of Northern
Northern Colorado Colorado, expanding its footprint to 121 clinics across 10 states.
New MainStream Capital has partnered with Anne Arundel Dermatology to invest in
AAD Dermatology Management. The group will utilize Anne Arundel Dermatology,
AAD Dermatology
a group of 30 providers out of 16 locations (including clinics, surgery centers, and a
Management
dermatologic lab), as its platform for future expansion via de novo development and
acquisitions.
SV Life Sciences has led a Series A round of $12.4 million in financing for Schweiger
Schweiger
Dermatology. Schweiger Dermatology operated 14 dermatology practices at the time
Dermatology
of the transaction, and will utilize SV’s backing for continued expansion in the New
York Metro area.
Sources: Becker’s ASC Review; PR Newswire; SEC Filings; Capital IQ; YAHOO! Finance; PHP Estimates. This document has been compiled with publicly available information. Provident Healthcare
Partners, LLC makes no guarantee of its accuracy or completeness. No data or statement should be construed to be a recommendation for the purchase, sale, or retention of any security.