Amulet forms Pennsylvania gastro group via $130 mln deal

  • Existing investors in GI: Waud, Frazier, Audax
  • Sell-side adviser: Oppenheimer
  • New MSO to be called U.S. Digestive Health

Amulet Capital is marrying three southeast Pennsylvania gastroenterology groups in a transaction valued at $130 million, according to people familiar with the matter.

The Greenwich, Connecticut, firm agreed to invest in and merge Regional Gi, Main Line Gastroenterology Associates and Digestive Disease Associates, creating the seventh largest GI practice group in the country, the people said.

In connection with the transaction, which has not yet closed, Amulet has formed a new management services organization that will be called U.S. Digestive Health, one of the people said.

A new management team, including an unidentified CEO, will be installed, the person said.

The transaction follows an Oppenheimer-run sales process that another one of the people said kicked off about a year ago.

The newly combined group includes about 60 physicians, offering digestive health treatment and services to patients across southeastern Pennsylvania.

Amulet, led by Managing Partners Ramsey Frank and Jay Rose, invests exclusively in middle-market healthcare companies. Its current portfolio companies include Synteract, Open Health and Children’s Choice Pediatric Dental Care.

While Amulet’s investment marks the first new platform investment in the GI specialty year-to-date, several other groups in regions including Arizona and Texas are testing the market, sources have said.

One of those is Colorado Springs’ Peak Gastroenterology Associates, which is said to be nearing the conclusion of its Alkaline Advisors-run auction.

Only a small handful of sponsors have entered the GI specialty to date, with Audax Private Equity among the first movers via its April 2015 recapitalization of Miami’s Gastro Health.

Private equity interest in the vertical accelerated in 2018 amid the sales processes for Texas Digestive Disease Consultants and Atlanta Gastroenterology Associates.

TDDC was marketed with an option for buyers to simultaneously acquire and merge the platform with AGA, but the two were never combined.

Rather, Waud Capital ultimately invested in TTDC and created The GI Alliance, while AGA subsequently secured a buyer in Frazier Healthcare Partners, which then formed United Digestive.

Action Item: Check out Amulet’s latest Form ADV: https://www.adviserinfo.sec.gov/Firm/172012