Consolidation is skyrocketing in gastroenterology, particularly with private equity – nearly 10% of U.S. gastroenterologists are part of PE-backed practices, according to a 2023 study published in Gastroenterology & Hepatology.
Here are five major private equity transactions shaping the gastroenterology landscape:
1. One GI and Webster Equity Partners
In 2020, Webster Equity Partners launched One GI through a partnership with Gastro One. Based in Brentwood, Tenn., One GI now supports 195 physicians across 65 locations. Within two years of Webster’s acquisition, the number of physicians affiliated with One GI more than quadrupled, and its footprint expanded to six states, according to Gastroenterology & Hepatology.
“Early studies suggest patients will face increased costs,” the study authors said, adding that “PE ownership could lead to increased costs for patients and health insurers, and increased revenues and thus profits to owners, which could imply that PE-backed practices are a net negative for society.”
2. Gastro Health and Omers
In 2021, Miami-based Gastro Health was acquired by private equity firm Omers for an estimated enterprise value of $950 million. Previously, it was owned by Audax Private Equity, which had purchased the company in 2016.
Gastro Health’s Chief Medical Officer, Eugenio Hernandez, MD, spoke with Becker’s in February about the company’s evolving growth strategy.
“Right now, our primary focus is organic growth. In the past, there was significant M&A activity across GI platforms, but with market shifts and rising interest rates, our approach has evolved,” Dr. Hernandez said. “We still pursue M&A opportunities where it makes sense, but we’re also emphasizing de novo growth — establishing new care centers in areas with high patient demand. De novo expansion is more challenging because it requires strong mentorship. You can’t just place a physician in a new market without ensuring they have adequate support. That’s why we’re intentional about how we grow.”
3. PE GI Solutions and SCA Health
Formerly known as Physicians Endoscopy, PE GI Solutions was acquired by SCA Health — the ASC division of Optum — in 2022, according to a report from Healthcare Appraisers. The company had previously been purchased by private equity firm Kelso & Company in 2016.
4. United Digestive and Kohlberg & Company
In March 2023, Kohlberg & Company acquired United Digestive — a GI platform with 80 locations — for $500 million from Frazier Healthcare Partners.
CEO Mark Gilreath and President Neal Patel, MD, spoke with Becker’s about the transition and future direction.
“Ultimately, I think we’ve found the market to be robust for great assets,” Dr. Patel said. “I think we and the market define that as highly integrated platforms with demonstrated income repair for physicians and creative growth through organic and [merger and acquisition] initiatives, and that’s what we’ve experienced.”
5. GI Alliance and Cardinal Health
In November, Cardinal Health acquired a majority stake in GI Alliance for $2.8 billion — one of the largest transactions in the gastroenterology sector in recent years. The deal reflects a growing trend of pharmaceutical-focused companies entering the physician practice space, according to a blog post from VMG Health.
Dublin, Ohio-based Cardinal Health, traditionally known for pharmaceutical and medical product distribution, now joins a new cohort of buyers — including insurers, pharma companies and medical equipment distributors — pursuing physician group acquisitions to build vertically integrated care platforms.
Unlike traditional PE models that focus on short-term returns, these new entrants are prioritizing long-term strategic alignment and operational synergy. According to VMG Health, this approach better positions them to navigate regulatory pressures and economic volatility.
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