Genealogy of a Private Practice Acquisition: Envision Acquires Sunshine

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Envision Healthcare, Greenwood Village, CO, has acquired 35-radiologist Sunshine Radiology, a private practice in the Tampa, Fla. area, expanding its radiology presence in the Sunshine State.

Sunshine Radiology was founded in 2008—the same year that Florida Hospital’s East Region in Orlando parted ways with its longstanding radiology provider (Florida Radiology Associates) and hired some of those radiologists back as employees. Sunshine Radiology, founded by David Rippe, MD, Sunshine’s president, Ronald Prati, MD, and Roberta Cove, CEO, has been the exclusive radiology provider for Florida Hospital West Region, a division of the Adventist Health System.

“Having worked within the Florida Hospital System for 25-plus years, the founding of Sunshine Radiology in many ways represented the culmination of our careers for Dr. Rippe, Dr. Prati, and myself,” said Cove in a press release issued by Provident Healthcare Partners, financial advisor to Sunshine in the transaction. “…with Envision Healthcare, Sunshine’s physicians and management team have found a partner that will help the group continue to thrive as interpretation volumes grow.”

Sunshine Radiology provides radiology services for nine hospitals, eight breast centers, and one hospital-owned outpatient imaging center. It reported doing 360,000 studies in 2012 in the 2013 edition of the Radiology 100, a list of the 100 largest radiology practices published by Radiology Business Journal.

The New Player

Envision Healthcare has emerged recently as a player in the radiology services provider space through strategic acquisitions. The company grew out of EmCare, founded in 1972, according to Wikipedia. Laidlaw, a transit provider, bought EmCare in 1997, then sold it and another acquisition, American Medical Response (a medical transportation company), to Onex, a private equity investment firm and holding company based in Toronto, Ontario, no stranger to radiology. Onex formed Emergency Medical Services Corporation (EMSC) and took that company public at the close of 2005.

In 2011, EMSC was acquired by Clayton, Dubilier & Rice, founded in 1978 and described as one of the oldest private equity investment companies in the world by Wikipedia. EMSC changed its name to Envision Healthcare in 2013, and went public as EVHC. That year, EmCare entered into a partnership with Rays, a physician-owned teleradiology company.

Meanwhile, in May of 2014, a key player in the ambulatory surgery center market, AmSurg, acquired Sheridan Healthcare in May of 2014, for more than $2 billion, which provided operations support in radiology. In January of 2015, Sheridan acquired Radisphere, which had 100 teleradiologists at the time, and shortly thereafter announced the acquisition of Radiology Associates of Hollywood’s 54-radiologist private practice in Broward County.

In June of this year, Envision Healthcare merged with Amsurg, forming a $9 billion company, and putting Envision firmly in radiology operations and clinical services.

Envision’s three-member board includes a Carol J. Burt, founder of Burt-Hilliard Investments and an alumnae of WellPoint and American Medical Response (see above). Burt also serves on the operating council for Consonance Capital Partners (CCP), a New York-based private equity firm focused on health care, where Nancy Ann DeParle is a partner. DeParle has extensive experience in both private equity and government, as the head of (CMS predecessor) Health Care Financing Administration during the latter years of the Clinton presidency and a stint as President Obama’s health care czar, charged with the passage of the Affordable Care Act.  DeParle also was a member of the Medicare Payment Advisory Commission from 2002 to 2008.

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