Private Equity Acquisitions Research Articles

The private equity funds’ aggressive acquisitions mania and the Willy Loman trauma

Abstract and Prologue This writing was undertaken in mid-2006 when the private equity funds were riding along their upward trajectories, attaining their apogee some time in mid-2007 when the Blackstone Group succeeded in getting off its IPO – even attracting some billions of dollars of Sovereign Chinese Wealth Funds – with KKR waiting in the wings to do an encore. This was a period of time that fully justified the strident reference to the phrase “mania” in the title. But then comes late 2007 with its manifestations of metastases regarding investments in subprimes, SIVs, CDOs, derivatives, and other forms of financial instruments that have been allowed to spread throughout our corporate and financial systems without control and certainly without transparency. As a consequence, the private equity acquisitions binge and related mania are now in early 2008, in remission.

Cochleovestibular Disorders and Allergy

To identify temporal and geographic trends in private equity (PE)–backed acquisitions of ophthalmology and optometry practices in the United States.A cross-sectional study using private equity acquisition and investment data from January 1, 2012, through October 20, 2019.A total of 228 PE acquisitions of ophthalmology and optometry practices in the United States between 2012 and 2019.Acquisition and financial investment data were compiled from 6 financial databases, 4 industry news outlets, and publicly available press releases from PE firms or platform companies.Yearly trends in ophthalmology and optometry acquisitions, including number of total acquisitions, clinical locations, and providers of acquired practices as well as subsequent sales, median holding period, geographic footprint, and financing status of each platform company.A total of 228 practices associated with 1466 clinical locations and 2146 ophthalmologists or optometrists were acquired by 29 PE-backed platform companies. Of these acquisitions, 127, 9, and 92 were comprehensive or multispecialty, retina, and optometry practices, respectively. Acquisitions increased rapidly between 2012 and 2019: 42 practices were acquired between 2012 and 2016 compared to 186 from 2017 through 2019. Financing rounds of platform companies paralleled temporal acquisition trends. Three platform companies, comprising 60% of platforms formed before 2016, were subsequently sold or recapitalized to new PE investors by the end of this study period with a median holding period of 3.5 years. In terms of geographic distribution, acquisitions occurred in 40 states with most PE firms developing multistate platform companies. New York and California were the 2 states with the greatest number of PE acquisitions with 22 and 19, respectively.Private equity–backed acquisitions of ophthalmology and optometry practices have increased rapidly since 2012, with some platform companies having already been sold or recapitalized to new investors. Additionally, private equity–backed platform companies have developed both regionally focused and multistate models of add-on acquisitions. Future research should assess the impact of PE investment on patient, provider, and practice metrics, including health outcomes, expenditures, procedural volume, and staff employment.