The eyecare field has experienced significant changes in recent years, particularly in practice consolidation and transition. Private equity investments have played an essential role in reshaping the industry. In this blog post, we will explore the growth of private equity in optometry, tracking its expansion and impact on the profession.
The Rise of Private Equity in Eyecare
Private equity investments in the eyecare industry began to gain traction in 2014, with the acquisition of Katzen Eye Group in Baltimore by Varsity Healthcare Partners. This marked the entry of private equity into the traditionally fragmented eyecare sector. Since then, there has been notable activity in various industry segments, including “retail” optometry, medically focused optometry groups, vertical integrations, and sub-specialty retina care.
The Growth of Private Equity-Backed Eyecare Platforms
As of May 2022, the number of private equity-backed eyecare platforms has steadily increased. Currently, there are 51 such platforms in operation. Additionally, 12 consolidations are pending transactions with outside investors. This trend indicates a growing interest in eyecare practices from private equity firms.
Penetration of Private Equity in the Optometry Profession
The impact of private equity on the optometry profession is evident in the numbers. In 2018, approximately 6.6 percent of all optometrists in the United States were practicing within private equity eyecare platforms. This indicates a significant presence and influence of private equity within the optometry industry. Furthermore, the growth rate in private equity-backed optometry practices has been parallel for both optometrists and ophthalmologists, suggesting a shared trend across the two professions.
Implications and Opportunities
Private equity investments in optometry reflect the industry’s growth potential and the resilience of eyecare practices in the face of economic challenges. Private equity firms recognize the opportunities the eyecare industry presents, which offers a recession-resistant market with excellent growth prospects. The influx of private equity funding provides resources for practices to expand, enhance services, and explore new avenues of growth.
However, eyecare professionals must carefully consider the implications of private equity partnerships. While these investments can provide capital and resources, they may also come with changes to practice management, operational structure, and decision-making processes. Optometrists and ophthalmologists must evaluate private equity involvement’s potential benefits and risks, ensuring alignment with their long-term goals and values.
Private equity has emerged as a significant force in the optometry industry, driving practice consolidation and expansion. The increasing number of private equity-backed eyecare platforms highlights the growth potential and attractiveness of the field. Optometrists and ophthalmologists should stay informed about these developments, weighing the opportunities and potential impacts to make informed decisions about their practices’ future.