INSIGHT

Consolidation and Investment in Dermatology

Dermatology has been one of the fastest growing subsectors within physician services in recent years. The $13 billion market is expected to grow at 5.8% to upwards of $16 billion through 2019, making it the second-fastest-growing provider specialty, trailing only Physical Therapy, in terms of top line revenue growth. Volume growth of this nature, coupled with significant fragmentation in the marketplace, has created a robust investment and acquisition environment, as evidenced by more than 30 transactions executed over the last 24 months. We are expecting this trend to continue as practices continue to draw interest from the private equity community, as well as from private equity backed consolidators. Due to the significant fragmentation and scarcity of larger practices in the sector, private equity groups are increasingly coming downstream to act on their investment theses. Strategic consolidation has also gained traction due to the absence of larger practices as private equity backed platforms have executed add-on acquisition strategies in order to realize synergies, expand into new geographies and accelerate growth. Scalable companies with robust infrastructure, fitting the platform mold, have commanded some of the highest multiples within healthcare services due to pent-up demand and the ability to quickly expand.

Report Summary
• Consolidation Drivers
• Private Equity Interest
• Private Equity Exits
• Concluding Thoughts

Provident Dermatology Deal Team

Ajeya Shekar, Vice President

Steven Grassa, Associate

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  • “A lot of investment bankers were interviewed, Provident was chosen. Provident delivered. My clients could not be happier.”

  • “While the decision to sell our business was a difficult one, Provident vigilantly represented and protected our best interests throughout the transaction.  Provident was the right choice for Cascade and I would recommend their services to anyone.”

  • “Provident’s depth of experience and practical business savvy was demonstrated in their ability to cut through what sometimes looked like impasse.”

  • ”I have a tremendous amount of appreciation and gratitude to the Provident team for their hard work and diligence throughout this process. Each and every member of the Provident team is excellent at their jobs and it has been a pleasure working with such a professional team. Provident has provided outstanding guidance and counsel, and this deal could never have gotten done without Provident’s leadership.”

  • “Provident listened to our story, confirmed that our business was valuable and made us feel like this was the only transaction important to them.”

  • “We would not have been successful navigating the process without Provident’s hard work and active participation. They exceeded our expectations and we would highly recommend them to any health care company seeking a knowledgeable and engaged investment banking firm.”

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