Houston’s Kelsey-Seybold taps adviser to consider strategic options

  • Integrated medical group operates 19 clinics
  • Operates own MA plan, Kelsey-Care Advantage
  • Ares in ’17 invested in Chicago group DuPage

Kelsey-Seybold Clinic, a for-profit integrated healthcare organization in the greater Houston area, hired an adviser to weigh strategic alternatives in the coming year, Buyouts has learned.

Evercore has been engaged to provide financial advice to the Pearland, Texas, medical group, sources familiar with the matter said. Kelsey-Seybold will consider a vast range of strategic options, including potential transactions with financial sponsors, they said.

Founded in 1949, Kelsey-Seybold is one of the largest physician-owned multispecialty group practices in the greater Houston area, with more than 50 medical specialties across 19 clinics and a sleep center, according to its website. Kelsey-Seybold also is a major provider of healthcare to employees of NASA.

Kelsey-Seybold became the first medical organization in the U.S. accredited as an Accountable Care Organization in 2012. It also owns and operates its own Medicare Advantage plan for seniors, Kelsey-Care Advantage.

Tony Lin took over as chairman in 2016 as part of a planned transition, having previously held many leadership roles within the organization.

While it remains too early to speculate how the process will unfold, Kelsey-Seybold is expected to field strong interest from a variety of parties.

The company’s coordinated-care model is viewed as compelling, as is its scale in the Houston metro area — one of the fastest growing markets in the country, one source said.

In related activity, Ares Management in August 2017 invested in DuPage Medical Group, the largest independent multispecialty physician group in Illinois. That deal was valued at $1.45 billion.

Ares bought a stake in DuPage’s practice-management company from Summit Partners, which less than two years earlier led a $250 million equity-and-debt investment in the company. DuPage’s physician group remained 100 percent physician- owned and -operated.

Representatives of Evercore and Kelsey-Seybold declined to comment.

Action Item: Reach Kelsey-Seybold’s administrative office at +1 713-442-5700​

Update: This story has been updated to reflect Kelsey-Seybold’s accurate clinic count. A previous version stated it operates 20 locations, but one was destroyed during Harvey and has yet to be rebuilt.