Large orthopedic practices could fetch 10x EBITDA — 4 insights into PE investment

Written by Eric Oliver | August 15, 2019 | Print  |

Private equity investment in the orthopedic space is increasing, and analysts think there's still a way to go, according to Mergermarket's exploration of the topic for Forbes.

What you should know:

1. Orthopedic surgeons are seeking investors to ensure protection from emerging reimbursement trends and increasing equipment costs.

2. Private equity investors are becoming more comfortable around reimbursement and regulatory risk because of the opportunities afforded by the physician practice management space. For example, orthopedic practices have several ancillary options that can increase operating margins.

3. Mergermarket analysts predict that larger platform groups could fetch 10 times EBITDA valuations or higher.

4. However, analysts have reservations about potential future growth. Where dermatology and dental practices can succeed throughout the country, orthopedic practices are usually tied to affiliated hospitals or physician groups.

Read the whole piece here.

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