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- Private-equity firm Warburg Pincus is buying Summit Medical Group, a doctor-owned multi-specialty practice based in New Jersey.
- It plans to merge the practice with New York-based urgent-care company CityMD, in which it already owns a majority stake.
- Healthcare companies such as UnitedHealth Group and CVS Health are using deals to create new ways of delivering healthcare.
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Private-equity firm Warburg Pincus plans to acquire one of New Jersey’s biggest doctor groups and merge it with an urgent-care chain it already owns, Business Insider has learned, as investors up their bets on reshaping how medical care is delivered.
Warburg Pincus plans to combine the physician group, called Summit Medical Group, with the urgent-care chain CityMD, and will own a majority stake in the combined firm. Together, they’ll be able to offer patients comprehensive care, from surgery centers and imaging to primary care. The value of the deal wasn’t disclosed.
"Merging CityMD’s strength in urgent care and Summit Medical Group’s expertise in coordinated, value-based primary and specialty care, will create a uniquely accessible and comprehensive model for patients," the companies said in a statement. "The combined organization will offer patients a seamless experience across a full spectrum of high-quality primary, specialty, and urgent care."
Major companies in healthcare are using deals to create giant groups of doctors and other care providers, as they seek more control over how people get care and at what cost. UnitedHealth Group, the biggest US health insurer, is seeking to transform its care-delivery arm OptumCare into a $100 billion business. OptumCare bought urgent-care chain MedExpress in 2015 for a reported $1.5 billion, and also operates surgery centers and primary-care practices. CVS Health plans to open care centers in 1,500 stores, following its acquisition of the health insurer Aetna.
CityMD is an urgent-care company that now has more than 120 locations, mainly in the New York City area and New Jersey. It also has a presence in Washington State. Warburg Pincus took a majority stake in CityMD in 2017 in a deal that reportedly valued the urgent-care company at $600 million.
Urgent care is catching on as Americans seek convenient ways to get healthcare. According to the Urgent Care Association, the industry’s trade group, there were 8,774 urgent care centers in the US in 2018.
Summit Medical Group is a multispecialty medical practice based in northern New Jersey with more than 80 locations, covering surgery centers, imaging, primary care, gynecology, and urgent care. It was owned by its doctors, and says it’s the largest such group in New Jersey.
Summit physicians will continue to own a stake in the new firm, and the combined company will remain doctor-led. CityMD is currently led by cofounder Richard Park, an emergency-medicine doctor. Jeffrey Le Benger, Summit’s CEO, is a surgeon.
Warburg Pincus has invested more than $10 billion in healthcare companies over time, such as the health insurers Alignment Healthcare, Coventry Health Care, and Humana.
The transaction still has to be approved by regulators, the companies said.
To contact the reporter on this story, email lramsey@businessinsider.com.
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Source: Business Insider – lramsey@businessinsider.com (Lydia Ramsey)