Texas gastro group TDDC explores options

  • Led by founder and CEO Jim Weber, MD
  • TDDC: >60 locations and ~125 doctors
  • Audax in 2015 recapped Gastro Health

The country’s largest gastroenterology specialty group is weighing strategic alternatives, Buyouts has learned.

Texas Digestive Disease Consultants has retained Nexus Health Capital, a boutique healthcare bank, to advise on a sponsor-focused process, three sources familiar with the matter said.

TDDC, Dallas, offers procedures to treat various GI conditions and disorders such as acid reflux, colon cancer, Crohn’s disease and abdominal pain. The group encompasses about 125 doctors and operates in the Dallas-Fort Worth area, as well as in Houston, San Antonio and Austin.

The company provides ancillary services including anesthesia, pathology and infusion therapy, offerings that one of the sources noted drive much of the profitability at GI groups like TDDC. Through its research arm, TDDC also participates in clinical trials for intestinal and liver disorders.

Founder Jim Weber, a physician, leads TDDC as president and CEO.

TDDC expects to post north of $25 million in pro-forma adjusted Ebitda for the 12-months ending June 2018, according to one of the sources. The adjusted Ebitda figure includes anticipated practice acquisitions both within and outside the Texas market, the source said.

TDDC has already proven to be a consolidator of GI practices, most recently adding Greater Houston Gastroenterology. TDDC inherited another 15 clinics through the January deal, bringing its total network to more than 60 locations.

The physician practice management group has an in-network model and is reimbursed for services largely via commercial health insurance, one of the sources said.

Sponsor interest in GI has accelerated as of late, driven largely by the opportunity to consolidate a highly fragmented and growing vertical. TDDC, for its part, is expected to benefit from scarcity value as one of few operators of size.

One of the only investors to invest in the GI space to date is Audax Private Equity, which in April 2015 recapitalized Gastro Health, a Miami group. Gastro Health today includes more than 90 physicians specializing in digestive and colon health.

Other independent assets of scale include Digestive Health Associates of Texas, Minnesota Gastroenterology, Borland-Groover Clinic and Atlanta Gastroenterology Associates.

Representatives of TDDC and Nexus Health couldn’t immediately be reached.

Action item: Learn more about TDDC here: https://www.tddctx.com/

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