Private equity investors are continuing to invest into physician specialties, driven by supply constraints, outpatient migration and cash flow, according to a Nov. 18 report from Focus Investment Bankers.
Here’s a look into why each physician specialty is drawing investor interest, according to the report:
- Cardiology remains one of the most sought-after segments, fueled by a shrinking pool of independent groups and strong margins. Platform transactions are frequently reaching mid-teens EBITDA multiples, according to the report, supported by diagnostic testing revenue and continued expansion of outpatient cath labs.
- Ophthalmology is seeing intensified competition as private equity firms chase a dwindling number of high-quality independent practices. Several significant platform transactions have focused on retina-focused assets.
- Women’s health continues to be viewed as a stable investment, with multiple growth avenues including fertility services and behavioral health integration helping sustain interest.
- Plastic surgery and aesthetics is one of the newest areas for platform creation, generating high deal volume and fierce competition for anchor assets. Investors are drawn to the cash-pay model and rising consumer demand for aesthetic procedures.
- Oncology and urology are attracting capital from larger players, with heavy drug utilization creating opportunities for vertical integration and scale-driven efficiencies.
- Gastroenterology continues to command premium valuations, supported by strong demand for outpatient endoscopy and ancillary services that preserve reliable cash flow profiles.
- Orthopedics is benefiting from steady growth as more procedures shift into ASCs and musculoskeletal demand rises alongside an aging population.
- Primary care is seeing renewed investor interest through value-based and capitated care models. Practices demonstrating success in Medicare Advantage and ACO frameworks are now reaching double-digit EBITDA multiples.
- Dermatology and dentistry, once among the fastest-growing physician investment sectors, are experiencing modest multiple compression following several consolidation waves.
