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The Fast Pace deal and the rise of urgent care: 7 things to know

As healthcare shifts toward the outpatient arena, urgent care centers remain popular with patients and consumers looking to receive convenient and affordable treatment for minor conditions, imaging and blood tests.

Given this trend, the urgent care industry is poised for growth. In a 2014 whitepaper from McGuireWoods and Urgent Care Association of America, one industry professional predicted the urgent care industry will see a lot of activity through 2019 and beyond, since some large metropolitan areas could support two to three times the number of current urgent care providers.

This prediction is demonstrated in the recent acquisition of SCP Urgent Care, doing business as Fast Pace Urgent Care, by Revelstoke Capital Partners. The transaction closed Aug. 22.

Highlighted below are seven things to know about the transaction as well as urgent care growth.

1. One of the players in the transaction is Brentwood, Tenn.-based Fast Pace, a provider of urgent care and primary care services. Since 2013, the company has grown from seven clinics in Tennessee to 36 clinics in Tennessee and Kentucky. The growth came primarily through opening 26 new locations and acquiring three locations. Fast Pace is a portfolio company of Shore Capital, a Chicago-based private equity firm focused exclusively on microcap healthcare investments.

2. The other player in the transaction is private equity firm Revelstoke, which focuses on building healthcare and business services companies. Since the firm's inception in mid-2013, Revelstoke has raised more than $700 million in equity commitments across its various investing entities and has completed 23 acquisitions totaling over $1.2 billion in enterprise value, according to an announcement of the transaction.

3. Houlihan Lokey advised Fast Pace on the acquisition. The company said its healthcare group provides advice to healthcare services, managed care, seniors housing, biopharmaceutical and life sciences companies. Including Fast Pace, Houlihan Lokey has advised on four urgent care transactions.

5. Scott Becker, publisher of Becker's Healthcare, said, "The deal is reflective of the high amount of interest in the urgent care area."

6. For instance, Nashville, Tenn.-based Hospital Corporation of America in November acquired Urgent Care Extra's Nevada operations, which include 14 urgent care centers in Las Vegas.

In February, San Francisco-based Dignity Health announced it is teaming up with Atlanta-based GoHealth Urgent Care in a joint venture to bring consumer-focused urgent care to the Bay Area. And Last August, Boston-based Partners HealthCare announced plans to open up to 12 urgent care clinics in the next three years to cater to patients who need medical care, but don't need to go to an emergency room.

7. These investments are driven partly by the rise in active patients older than 50 who desire convenient care for injuries and illness, but want to be connected to a larger system where their regular physician may practice and where urgent visits can become part of their medical record, Tom Charland, CEO of consulting firm Merchant Medicine, told The Wall Street Journal.

 

More articles on transactions and valuations:
South Shore Medical Center seeks to re-establish ties with Boston Children’s Hospital
Nathan Adelson Hospice likely to acquire Solari Hospice Care
Make room for one more: St. Clair Hospital to join Mayo Clinic Care Network

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