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The practice of financial groups acquiring health care-focused businesses is not a recent development, as noted in a JAMA Ophthalmology note published in June. While this phenomenon began years ago with practice management companies often acting as the acquirers (a model that proved too expensive and unsustainable), today it’s more likely private-equity backed management firms purchasing health care practices, including eyecare businesses.

As VM reported in the fall of 2017, private equity investment has crescendoed, particularly in the past five years, as mid-size and large investment groups—of different types, sizes and structures—have entered the space in a more visible way in North America, with acquisitions of both large and regional optical retail/ECP groups as well as hundreds of smaller independent offices.

Among the rationale for these deals, the article noted, is that investments in health care “are based on sound economic principles,” notably an aging population with increasing prevalence of chronic diseases and the fact that “inherent inefficiencies in current delivery systems” make health care ripe for consolidation and modernization.

“The role of private equity in health care can be a big positive, especially in the instances where private equity partners with exceptional doctors. We can help grow practices and expand access to high-quality patient care,” Alpine Investors vice president of investing Haley Beck told Vision Monday recently following her firm’s June investment in Northeast Ohio Eye Surgeons. “It’s a combination of high-quality clinicians and folks with business acumen who together can deliver better access and better quality patient care.”

This is much the same philosophy of several PE-backed investment firms that have stepped up their activity in the optometry sector the past few years. One of the biggest deals in the optical/eyecare segment hit in early June, when a Goldman Sachs-managed merchant banking health care fund (West Street Capital Partners VII) reached a deal to acquire control of MyEyeDr. from Altas Partners and Caisse de dépôt et placement du Québec, a Canadian pension fund. The terms of the deal, which is expected to close in the third quarter, were not announced, but it was valued at about $2.7 billion by The Wall Street Journal.

Today, the groups heavily involved in the optometric space are continuing their expansion pace, and building up their own infrastructure of services to handle the various business management side of practices and present new career paths to optometrists and optometry groups.