Private Equity in Ophthalmology and Optometry: Analysis of Acquisitions from 2012 through 2019 in the United States

Abstract

Purpose: To identify temporal and geographic trends in private equity (PE)-backed acquisitions of ophthalmology and optometry practices in the United States.

Design: A cross-sectional study using private equity acquisition and investment data from January 1, 2012, through October 20, 2019.

Participants: A total of 228 PE acquisitions of ophthalmology and optometry practices in the United States between 2012 and 2019.

Methods: 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.

Main outcome measures: 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.

Results: 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.

Conclusions: 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.