DuPage Medical Group, the independent multispecialty physician group backed by Summit Partners, is nearing the end of its sponsor-focused sales process, four sources familiar with the matter told Buyouts.
Ares Management is said to be the frontrunner in the process for the Chicago-area medical group, according to three of the sources.
DuPage is expected to command an EBITDA multiple in the 14x-plus range, two of the sources said.
Led by CEO Mike Kasper, DuPage is the largest independent multispecialty physician group in Illinois, with more than 600 physicians in over 50 specialties. The group, whose specialties range from cardiology to orthopedics, serves more than 80 Chicago suburbs.
DuPage is viewed as a highly regarded asset largely because it operates a well-coordinated physician model, one of the sources said. Many medical groups that merge to get big are simply a large collection of physician groups under the same tax ID but remain relatively uncoordinated, this person explained.
DuPage, on the other hand, has a sophisticated method of enhancing ancillary offerings by referring patients to partners within the group, the source said. This then boosts doctor groups’ compensation and, ultimately, DuPage’s top line.
The anticipated sale comes less than two years after Boston growth equity firm Summit led a $250 million equity-and-debt investment in DuPage.
The capital was used to support the group’s practice-management company, DMG Practice Management Solutions/MPAS (Midwest Physician Administrative Services), an announcement at the time said.
DuPage, Downers Grove, Illinois, projected $575 million in 2015 revenue, Crain’s Chicago Business wrote in a January 2016 report following the Summit deal. One of the sources estimated current EBITDA for the company lies in the ballpark of $35 million to $50 million.
Interestingly, DuPage remained wholly physician-owned and -governed following the December 2015 deal with Summit. The medical group was advised by Cain Brothers on the investment.
The Summit team leading the DuPage investment includes Managing Director Darren Black and Vice President Ross Stern.
DuPage itself has fueled rapid growth through its own dealmaking, having been established in 1999 with only a handful of physicians.
In its latest purchase, the physician group in late June said it would buy Northwest Health Care Associates, a multispecialty clinic serving Chicago’s northwest suburbs.
A DuPage spokeswoman declined to comment, while representatives of Summit and Ares didn’t immediately return requests for comment.
Action Item: Get in touch with Summit’s Darren Black at +1 617-824-1011
Woman doctor shaking hand with businessman in the office. Young medical specialist in uniform meeting partner for discussion. Shallow depth of field. Photo courtesy of seoterra/iStock/Getty Images