The PE arms race — From the deal heard round the world to what's next in GI

On April 18, 1775, the shot heard round the world allegedly began the American Revolution; 87,986 days later, Miami-based Gastro Health partnered with Audax Private Equity, marking the first major PE-investment in the GI space.

From 'bad idea' to the next big thing
Miami-based Gastro Health was one of the first gastroenterology practices to explore and the first to partner with a PE company, selecting Audax Capital in 2016 after a two-year search process. The hunt for a PE partnership started in 2014, when a few practices saw the benefits of taking on a investor, Gastro Health President James Leavitt, MD said.

"I spoke to groups several times before we did our deal to see if they wanted to join," Dr. Leavitt said. "A lot of people thought it was a bad idea."

For Gastro Health and Dr. Leavitt, taking on a PE-partner was less about doing a deal and more about implementing a strategy and a vision. Gastro Health was already a prolific consolidation force, acquiring several practices from 2006 to 2014, and growing from 27 physicians to 47 physicians, but Dr. Leavitt said he had a vision for more.

"Since [we closed the deal], we went from 47 physicians in June 2016 to more than 120 today," Dr. Leavitt said. "And we aren't just a group of gastroenterologists. We're a platform company to delivery gastrointestinal care. … We have everything you need to deliver gastrointestinal care outside of a hospital."