A New Wave of Investment & Consolidation in Cardiology

Published March 2020

The initial wave of consolidation within physician practice management enabled private equity investors to generate high returns in specialties such as dermatology and ophthalmology, among others. These investors are now exploring investment opportunities in specialties that have historically experienced minimal private equity activity, but demonstrate similar organic and roll-up growth potential. Although cardiology as a specialty has experienced hospital-led consolidation over the past several years, private equity firms have only recently begun creating investment theses in the specialty. In fact, the industry saw its first major acquisition by private equity when Comvest Partners and Athyrium Capital Management acquired Sunset Cardiology in January 2019, through its multispecialty portfolio company, IMC Health Medical Centers. There are several factors and recent developments that make cardiology a highly attractive opportunity for private equity groups. Given the wide breadth of ancillary service offerings, increasing outpatient surgical volume, an aging population, and the growing importance of cardiology to overall healthcare, there is significant opportunity for private equity led consolidation. Further, technological improvements in cardiac medical devices and changes in reimbursement regulation are lowering costs and shifting many procedures that were once reliably inpatient to the outpatient realm.

Report Summary
• Private Equity Investors Eying the Cardiology Sector as New Wave of Investment
• Strong Demand Presents Opportunity in Cardiology Industry
• Burdened Supply and Low Regional Concentration Relative to Population Stimulates Trend Towards Consolidation
• Technological Advancement Has Potential to Increase Quality of Care and Profits
• Recent CMS Changes Contribute to Opportunity for ASCs
• Private Equity Led Consolidation Opportunity
• Private Equity Investments Explained
• Concluding Thoughts