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Sunday, 21 January 2018 12:38

PE-backed firm acquires Shoreline Vision, seeks other deals

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The deal to buy a majority stake in Muskegon-based Shoreline Vision serves as the largest transaction yet for Great Lakes Management Services Organization.

Formed last spring when Chicago-based private equity firm Sterling Partners acquired a majority stake in Grand Rapids Ophthalmology PC, Great Lakes MSO has other deals in the works and has been receiving inquiries from across the state, said Chief Development Officer Dan Hosler.

“Folks are coming to us,” Hosler said. “It’s going to be a busy 2018.”

Through the deal with Shoreline Vision, Great Lakes MSO extends its reach further across the region and deeper into the lakeshore market. Founded in 1996, Shoreline Vision has six retail locations in Muskegon, Norton Shores, Spring Lake, Grand Haven and Fremont, plus an eye surgery center in Muskegon.

Terms of the deal were not disclosed.

“Every decision Shoreline Vision makes is dependent on improving our patients’ care, whether it is investing in the latest technology, adding sub-specialty physicians, or improving our facilities,” Dr. John Oltean, a founding member of Shoreline Vision, said in a statement announcing the deal. “Our latest decision to partner with Great Lakes MSO and the vast resources they can provide is consistent with that theme. We are certain this will benefit our patients, employees, and community for years to come.”

Great Lakes MSO followed up the Shoreline Vision deal with an investment last week in Michigan Optical, a Grand Rapids-based eye care practice. Douglas Cramer, who founded Michigan Optical in 2006, remains with the practice as an optician and location director.

With the deal for Shoreline Vision, the opportunity for Great Lakes MSO to invest came from physicians at both practices having known one another for years, Hosler said.

The deal allows Great Lakes MSO to “connect the dots” between Shoreline Vision’s presence on the lakeshore and Grand Rapids Ophthalmology’s 12 locations, many of which are concentrated in Kent County.

“We think there’s definitely a lot of opportunity to better coordinate access for patients up and down the West Michigan shoreline. There are opportunities to provide more locations for our patients (and) better access to cutting-edge health care technology,” Hosler said. “In many ways, it was a natural opportunity to combine forces.”

SEEKING OPPORTUNITIES

Following Sterling Partners’ initial investment in Grand Rapids Ophthalmology in May 2017, Great Lakes MSO subsequently acquired Walker Surgical Center in November and an eye care practice in East Grand Rapids in June. 

Great Lakes MSO handles back-office business functions such as I.T., human resources, billing and patient scheduling for its eye care practices.

After the Shoreline Vision deal, the company now has 17 retail locations and three surgery centers in West Michigan. Great Lakes MSO retained the Shoreline Vision name, in a move to preserve the brand equity the practice has built over the years with patients.

“These brands have been built and the trust has been established over decades,” Hosler said. “We really want to maintain that sacred relationship between doctor and patient, and a lot of times that rests with the brand that has been developed.”

In pursuing additional deals, Great Lakes MSO has a goal of doubling in size every year in terms of revenue, patient visits and locations, Hosler said. That will occur through acquisitions and opening new retail locations.

Since forming last spring, Great Lakes MSO has received a number of inquiries from eye care practices throughout Michigan.

“We’re getting more and more in-bound interest from both ophthalmologists and optometrists alike that want to be part of a bigger platform,” Hosler said.

PE ACTIVITY HEATS UP

As MiBiz reported this month, private equity investors today are looking more at the health care sector. That’s providing a new partnership option for physicians to consider as they evaluate their future.

“Dozens of private equity firms are active in the physician practice management segment. They are creating new buyer opportunities for physicians and their practices in a wide variety of specialties,” according to an August 2016 white paper by Cascade Partners LLC, a Southfield-based investment banking firm.

Cascade Partners helped to put together last year’s deal between Sterling Partners and Grand Rapids Ophthalmology. In the white paper, the firm listed eye care, urgent care, emergency medicine and primary care as the medical practices that private equity investors are buying and making part of physician management practice companies.

In Sterling Partners, Great Lakes MSO is supported by a private equity firm that has more than $4 billion in assets under management. The firm invests in middle-market companies involved in health care and business services.

For now, Great Lakes MSO primarily looks to complete further deals in Michigan, although it eventually wants to seek out-of-state acquisitions.

“The entire state is fair game, but we have aspirations to move into adjacent states as well,” Hosler said. “Our primary focus is certainly Michigan. As we mature, we’ll definitely look to adjacent states.” 

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