Transacting in the Age of COVID-19

Perspectives from Physician Services Providers and Financial Investors
October 2021

Throughout the 5 to 10 years preceding the COVID-19 pandemic, transaction activity in the Physician Practice Management (PPM) Sector had generally been accelerating. Transaction activities initially originated from physician service businesses with a lower percentage of governmental reimbursement and a higher percentage of selfpay, such as dermatology and dental services. Eventually, these transactions spread across the PPM Sector to areas such as gastroenterology, urology, women’s health, primary care, ophthalmology, and orthopedics. Then, in March 2020, the COVID-19 pandemic hit, which had a profound effect on the entire world economy including the PPM Sector. In a recently conducted survey, Citrin Cooperman and Westcove Partners sought to capture the pulse of the PPM Sector during the time of the COVID-19 pandemic. This 65-respondent survey directed at physician services providers and financial investors aimed to capture the direct impact of COVID-19 on successfully consummating transactions, as well as to determine how the transaction process may have changed (for better or worse).
The Westcove Partners and Citrin Cooperman survey sought to determine the current deal trends in the PPM Sector, with an eye towards providing greater visibility to the key issues impacting both buyers (largely financial investors) and sellers (physician services providers) as they explore potential transactions. As will be discussed below, the general sentiment from financial investors and physician services providers towards pursuing transactions continued to be positive, particularly after the Spring and Summer of 2020, with physician services providers seeing their valuations remain elevated, and the pandemic providing the jolt needed to consider a sale or strategic partnership. However, key issues have emerged, which should be taken into consideration by financial investors and physician service providers as they look to successfully navigate the PPM Sector during the age of COVID-19.
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