Healthcare Industry Report Now Available

Factors Driving Consolidation in the Physician Provider Market

Consolidation is occurring at a rapid pace, and a lot of it is being driven by the following factors:

  1. Many new and young physicians are opting out of owning a practice due to lifestyle and financial changes, including higher student loan debt and desire for a defined salary and a more balanced schedule.
  2. Ongoing changes in quality reporting requirements and growing reimbursement scrutiny are increasing the cost and complexity of running a physician practice. Physician practices have had to invest in additional staff, systems and time to meet these increasing demands. The implementation of MACRA is exacerbating this problem for practices.
  3. The consumer environment in healthcare is changing dramatically as costs are shifting to patients from employers and insurers. As consumers bear more of their healthcare costs, they are seeking out information on pricing and quality and increasingly shopping around to find the best quality/value physician for their specific healthcare needs.

Gary Lewis Rejoins Cascade Partners

Gary Lewis rejoins Cascade Partners as part of the organization’s leadership team and will focus on mergers and acquisitions advisory. He will also lead the firm’s Financing Advisory activities drawing on his extensive experience as a private equity investor and sourcing and structuring unique debt and equity capital solutions for middle market companies.  

“We are excited to welcome Gary and his 20 years of investment banking, private investing and operating experience back to Cascade Partners.” says Rajesh U. Kothari, CFA, managing director. “His leadership coupled with his deep merger and acquisition and capital raising experience strengthens the resources and tools we have to offer to our clients and partners.”

Over the course of his career, Gary Lewis has worked with both middle market and Fortune 500 clients across a variety of industries, including healthcare, consumer/retail, business services and niche manufacturing.

The individual deal: Born of the recession...

Rajesh U. Kothari, CFA, spent some time speaking with Tom Henderson of Crain's Detroit on Strength Capital, a Birmingham-based private equity firm.

Strength stumbled onto the non-fund model as necessity required, but serendipitously it turned out to be ahead of the curve, says Rajesh Kothari, managing director of Cascade Partners LLC, a Southfield-based investment banker.

"This is a big trend in the industry, but these guys were pretty early doing it," he said. "It's been an evolution. The interest by investors, now, is less around funds and more on deals. Strength Capital has been able to find good deals. It's been a win-win for them. It's worked out great.

"Investors say, 'Let's not invest in a blind pool, let's invest in what we like.' The negative is, before, you were getting a portfolio of companies, so a bad deal could be offset by a good one. But if you are only investing in one company, all your eggs are in one basket."

Read the full article here.

Cascade Partners' Industrials Report Now Available

Industrials report for email.jpg

Cascade Partners has released its Industrials Industry Update highlighting some of the key trends in manufacturing. Some highlights from the report include:

  • The U.S. industrials market remains the most active and vibrant in the world
  • Opportunities are robust for both buyers and sellers
  • Sluggish organic growth and a desire to contain costs have led many manufacturing executives to utilize mergers and acquisitions as a tool to accelerate growth, increase scale and capture market share. 

Murray Feldman Covers Healthcare M&A Trend with Cascade's Rajesh Kothari

You can read the transcript below or listen to the report that ran on WWJ Radio on March 27 at 6:23am. 

Feldman Report Transcript:  Cascade Partners


March 27, 2017 6:23 a.m.

ANCHOR MURRAY FELDMAN:  The time is 6:23.  Companies are looking to invest in your doctor’s office.  I’m Murray Feldman with the Feldman Report on WWJ News Radio 950. 

Cascade Partners of Southfield has just helped Grand Rapids Ophthalmology partner up with a Chicago-based private equity firm, Sterling Partners. 

That’s just part of a big story. 

Raj Kothari at Cascade says Sterling Partners will bring business skills and consumer marketing skills to the Michigan operation so that doctors can just focus on being doctors.  The doctors will still own part of the company. 

These partnerships are happening in all medical fields.  In fact, Raj Kothari has done three of them and expects many more.  Four hundred deals have taken place around the country.  Twenty private equity firms are looking right now for eye care practices to buy into.  And if this hasn’t come to a doctor’s office you’re using, chances are it will. 

As Raj Kothari contends, the field of medicine is getting too complicated for doctors to manage the practices on their own, so they’ll partner up with business folks to run the business and they’ll run the medical part.  With the Feldman Report, I’m Murray Feldman, WWJ.

Cascade Partners Speaks with MiBiz on Grand Rapids Ophthalmology's Plan to Expand

Interested in reading the plans Grand Rapids Ophthalmology has for expansion?

Read the entire article here at MiBiz.

Here is an excerpt:

"The pressures from the changing economics, a tougher reimbursement environment and value-based contracting in health care have been driving consolidation for some time among physician practices, said Rajesh Kothari, managing director of Southfield-based investment banking firm Cascade Partners LLC that advised Grand Rapids Ophthalmology on the deal.

That consolidation trend is now pushing into specialties such as ophthalmology, dermatology and emergency medicine practices, Kothari said.

“It’s harder and harder as a small practice to be able to compete against the insurance companies, compete against the hospital systems and ultimately live with the changing world of Medicare and Medicaid,” he said.

A report Cascade Partners issued last summer noted the aging population is driving up incidence rates of macular degeneration, cataracts and glaucoma. It also cited health care reform as expanding the number of patients with vision benefits. Combined, those two trends are driving opportunity for the entire vision market.

“Eye care is a very fragmented market and there’s no big consolidator,” Kothari said."