The search sweet spot being an EV of $10m to $30m with EBITDA of $2.5m to $7.5m. Ideally the company stakeholders are seeking retirement or have a desire to divest. I have targeted key regions where I have past work experience and possess solid track records in the Health space (California, Arizona, Texas, Florida, Illinois and New York). However, I remain open to opportunities both outside of the direct space and geographies.
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One interesting space that I see is single provider or two provider medical practices with owners retiring. A lot of PEs won't touch these deals because they want to scale quickly and not deal with the messiness of finding a new provider. Many physicians are risk averse and don't want to take the risk of purchase and having to manage the business. Many of these deals simply don't get done and practices close up shop, and then the other local providers or hospitals just pick up the patients. If the deals do get done, they are typically at low valuations. If you can get smart on sourcing provider talent, I think there is a lot of opportunity here that both creates upside for retiring physicians that otherwise wouldn't sell and creates opportunity for new providers to gain some ownership without taking too much risk. And you can build yourself a nice business in the process.