Tweet by Blake Madden 🏥
There are huge transactions in healthcare that barely get any coverage.
Urology of Indiana, the largest urology group in the state in practice since 1887, just sold to a PE-backed group - U.S. Urology Partners.
• 40 urologists, 20 APPs
Here's how valuable they are:
Glancing at the website, the group has a ton of attractive characteristics:
• 14 locations
• Several ancillaries (ASC, high-volume vasectomies, renal surgery, lab, imaging, drugs)
• Tons of urology sub-specialists - and the largest urogynecology team!
• Cancer care
On the professional side, since this is a pretty established, platform-level practice, I'd wager that the urologists are fairly busy.
Based on average urologist compensation of around $500k, total comp is prob around $20M. If they're busy, likely higher.
Assuming a comp/rev ratio of ~55%, the practice is probably generating around $35-40M in professional revenue.
Then, there's ALL the ancillary stuff.
• Men's clinic
• In-office vasectomies
• Margin on chemo drugs
• ASC outpatient surgeries
• Cancer centers
• Lab, imaging
Stated more simply, a huge urology practice like this is an absolute beast of an operation.
At a (SUPER) high level, if a urologist generates $2M in downstream revenue, the practice is easily passing $100M when accounting for 20 APPs.
It probably sold at a huge premium.
On the PE side, it's a huge get for US Urology Partners for reasons outlined above. The affiliation grows its physician base by ~40%.
From here it can:
• Leverage higher payor contracts
• Negotiate better drug margin
• Boost volumes
& that's the fee for service play.
On the physician partner side, they get a huge $ pop from the buyout. Some of that equity rolls into US Urology Partners. Comes with the usual non-compete agreements, etc.
The physicians also get a huge financial partner for capital investment & growth prospects thru M&A.
I cover stuff like this often in my newsletter, Hospitalogy:
And here's the press release announcing the transaction:
This is the stuff nobody's talking about in healthcare. Huge sums of money exchange hands on the reg in the industry.
So...What'd I miss?