Ambulatory surgery center (ASC) dealmaking activity continues to heat up.
In one of the most recent deals, the private equity-backed Capitol Pain Institute (CPI) acquired Pain Care Surgery of Louisville. Strategically, the transaction adds to CPI’s advanced procedures offerings via spinal cord and peripheral nerve stimulation, interspinous stabilization and fixation, and posterior SI joint fusion.
Financial terms of the transaction were not disclosed.
“We believe that every patient deserves access to the most advanced pain treatments and compassionate, holistic care,” CPI Founder and President Dr. Matt Schocket said in a press release. “We are well-positioned to fulfill this commitment and make a positive impact on the lives of those living with chronic pain in the Louisville area by ensuring patients can receive the highest standard of care.”
CPI is backed by health care-focused PE firm Iron Path Capital. Some of the firm’s other health care investments include anatomic pathology provider Versant Diagnostics and urgent care services provider Emergence Health.
Following its acquisition of Pain Care Surgery of Louisville, CPI has clinics and ASCs across six states: Texas, Ohio, Kentucky, Minnesota, Indiana and Colorado.
CPI’s focus is interventional pain management, helping patients mitigate and manage their chronic-pain conditions through procedures such as spinal cord stimulator implants, among others. Schocket founded the company in Austin, Texas, in 2007.
“This acquisition represents another milestone in CPI’s growth strategy, reinforcing its position as a leading interventional pain management platform,” Iron Path Capital Co-Founder Rob Reistetter said in the release. “We continue to look for the right partners as we expand into new markets, offering valuable resources and collaborating with the top medical professionals to deliver the highest quality care to patients.”
The purchase of Pain Care Surgery of Louisville is an important one for CPI, partly due to strict certificate-of-need (CON) laws in the Kentucky market that limit de novo ASCs from opening.
CON regulations in health care are meant to prevent too many provider types from operating in a given geography, in turn avoiding market saturation and discouraging bad actors from popping up. For businesses in growth mode, such regulations make M&A essential.
The purchase also made sense for CPI because Pain Care Surgery of Louisville is located near CPI’s other locations in Elizabethtown and South Louisville.
“CPI welcomes non-affiliated physicians and practices that don’t have access to an ASC to use this facility, which will be set up for and cater specifically to interventional pain management,” the press release noted.
There have been several other ASC transactions announced in recent months.
In November, for example, Regent Surgical Health acquired majority ownership in Oregon Surgical Institute.
A month earlier, TriasMD, the parent company of DISC Surgery Centers, acquired California-based Pinnacle Surgery Center.
The large publicly traded ASC companies – such as United Surgical Partners International (USPI), Tenet Healthcare’s (NYSE: THC) ASC business – have been active on the dealmaking front as well.
Despite interest rates remaining high, ASC M&A activity is likely to continue throughout 2024, as the U.S. health care system as a whole collectively works to shift care away from traditional inpatient and high-cost settings.
Health care advisory firm VMG Health emphasized this point in a recently released report.
“The growth opportunities provided by the outpatient care setting will likely continue to attract additional suitors and further drive the growth and consolidation of the sub-industry,” the report stated.
