1. Institutional investors. Some of the largest ASC deals completed thus far in 2011 (and late 2010) have been driven by private equity (PE) groups. Advanced Pain Management, an interventional pain management practice, was acquired by Chicago Growth Partners in Dec. 2010. National Surgical Hospitals, an owner, operator and developer of surgical facilities, was acquired by Irving Place Capital in January and, currently, NovaMed is contemplating a take-private transaction by H.I.G. Capital. This trend of institutional investors seeking opportunities in the ASC segment is expected to continue as the industry further matures and consolidates.
2. Healthcare reform and the role of ASCs. While the actual policies for accountable care organizations are still being finalized and as bundled payments become more widely utilized, ASCs will undoubtedly play a pivotal role in helping contain costs. While some may argue that ASCs should be viewed as cost centers, surgery, when necessary, is still inevitable and ASCs provide a significant value and cost containment proposition for patients, payors and providers. Buyers and investors recognize this and are increasingly investing in ASC opportunities that have taken steps to prepare for implications of healthcare reform.
3. Recovery of the economy and public markets. As valuations of publicly traded companies steadily recover, and especially with a rebound shown by NovaMed and AmSurg, investors and strategic acquirers are once again bullish on the ASC segment and M&A activity has steadily improved again. Along with debt and credit being more readily available, potential sellers of ASCs should see an uptick in both the interest from strategic buyers as well as PE groups.
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