Specialty physician practice management consolidation will remain robust this year but as more data emerges about the performance of PPMs, investors may become increasingly selective, industry experts say. Since 2016, there have been 147 private equity-led specialty physician practice buyouts in the U.S., according to Mergermarket data. Valuation multiples for PPM platforms and add-on acquisitions, especially those in lucrative specialties, have reached lofty levels. Platform investments often easily command multiples of 15x EBITDA, with tuck-ins fetching between 6 and 9x EBITDA, according to several experts. Physicians owning stakes in PPMs typically split any profit left over after taking their regular salaries. This EBITDA is carved out in the event of a sale. As valuations of PPM assets climb, so too have adjustments to the EBITDA, the experts say.
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