No More Hustleporn: There are huge transactions in healthcare that barely get any coverage.

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Tweet by Blake Madden 🏥
https://twitter.com/B_Madden4

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   @B_Madden4:  
 
     
      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:
 
             @B_Madden4:  
 
     
      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
 
             @B_Madden4:  
 
     
      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.
 
             @B_Madden4:  
 
     
      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
 
             @B_Madden4:  
 
     
      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.
 
             @B_Madden4:  
 
     
      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.
 
             @B_Madden4:  
 
     
      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.
 
             @B_Madden4:  
 
     
      I cover stuff like this often in my newsletter, Hospitalogy:
 
         bit.ly/3bHfrf9  
 
     
 
  And here's the press release announcing the transaction:
 
         nms-capital.com/news/nms-capit…  
 
             @B_Madden4:  
 
     
      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?