FFL Partners Bets on Bone Health With Orthopedic Play

Sept. 21, 2020

FFL Partners is turning its attention to bone health after backing care providers focused on areas that include eyes, teeth and addiction treatment.

The San Francisco-based midmarket firm has formed U.S. Orthopedic Partners, which provides back-office services to practices offering musculoskeletal treatment to patients across the southeastern U.S. Thurston Group, a Chicago-based private-equity firm specializing in health-care deals, also backed USOP, FFL said in a news release.

Although FFL didn’t disclose terms of the deal, the firm says on its website that it typically commits $50 million to $250 million per transaction.

U.S. Orthopedic Partners will initially work with the Mississippi Sports Medicine and Orthopaedic Center, a provider whose services include ambulatory surgery, advanced imaging, rehabilitation, pain management, urgent care and sports medicine, according to the release. MSMOC receives around 89,000 patient visits annually and performs more than 10,000 surgeries each year.

Glen Silverman, chief executive of MSMOC, also serves as CEO of U.S. Orthopedic Partners, which provides practices with back-office services, such as billing, procurement, human resources, recruiting, data analytics and business operations, according to Chris Harris, managing partner at FFL.

Mr. Harris said that the firm had been scanning the orthopedics practice area for more than three years and had met with at least 30 clinical groups before landing on MSMOC.

“We were looking for the leading group to start with, because that’s the DNA of your whole organization going forward,” Mr. Harris said.

He added that an aging population has generated more demand for orthopedic services, but the supply side of clinics and specialists remains highly fragmented, making it ripe for consolidation.

“Historically, all of these procedures were done in hospitals and that’s shifting to an outpatient setting,” he said of orthopedics. “Often there are better outcomes because you’re in a facility that’s solely focused on fixing knees or hips,” and other musculoskeletal procedures, he said.

FFL has backed health-care services platforms focused on other specialties. Early this year, it sold EyeCare Partners LLC to Partners Group in a deal that valued the company at $2.2 billion. The firm initially backed the vision-care provider in 2015. Late last year, FFL invested in Orthodontic Partners LLC, a dental-services organization, and in 2017, the firm acquired addiction-treatment provider Summit Behavioral Healthcare LLC alongside fellow private-equity investor Lee Equity Partners.

Source: Wall Street Journal, FFL Partners Bets on Bone Health With Orthopedic Play