Gauge-backed Miami Beach Medical Group nears sale

Private equity appetite for at-risk primary care groups has grown, with MBMG joined by other players like InTandem's Cano that are also nearing a sale.

Miami Beach Medical Group, a Gauge Capital-backed provider of at-risk primary care in Florida, is in late stage deal discussions, according to multiple people familiar with the matter. 

Final bids for the medical group have been submitted and discussions are continuing with a subset of parties, they said. 

The sell-side marketed approximately $40 million in EBITDA and hopes to command a mid-teens multiple of EBITDA in a potential transaction, sources said. 

Oppenheimer is providing financial advice on the private equity-focused sale process, which narrowed after initially going out to a broad group of parties, the people said. 

Founded in 1997 originally as a cardiology group, MBMG has since transformed into a value-based, multi-specialty medical group with 19 centers across Florida, its website states.

The company and peers have performed well through covid-19 because of its capitated, risk-bearing model of reimbursement, while the growing senior population and Medicare Advantage has further propelled the category, sources told PE Hub.

Private equity appetite for such assets has also grown. Many groups that five years ago wouldn’t have shown interest in an at-risk primary care group have since built theses around global capitation models – or value-based-care models, sources told PE Hub.

Dallas-headquartered Gauge Capital made an undisclosed investment in MBMG in January 2017. The mid-market private equity firm in connection with the deal became the company’s majority owner, a source said.  

As part of the firm’s investment, Gauge’s Whitney Bowman, Drew Johnson, and Daniel Gedney joined the board of managers of the newly formed practice management organization serving MBMG, an announcement said at the time. 

In June, MBMG named Efrain Duarte CEO, with founder Dr. Rodolfo Dumenigo staying on as chairman of the board and taking the role of chief medical officer.

The process for MBMG comes as an even larger at-risk provider of primary care approaches a transaction. 

PE Hub wrote last week that InTandem Capital Partners’ Cano Health was fielding final bids, with three buyers groups in the running. Finalists included Bain Capital, OMERS Private Equity in partnership with Ontario Teachers’ Pension Plan, and Advent International in partnership with Centerbridge Partners, sources with knowledge of the matter said. 

Gauge, MBMG and Oppenheimer didn’t return PE Hub’s requests for comment.