Acquiring a company is one thing. Acquiring 10 more companies to build around that platform is another. The latter requires systems, processes, and expertise that go beyond cutting initial checks.
Waud Capital Partners has built a track record around this buy-and-build approach. The firm’s healthcare platform investments average more than 10 add-on acquisitions during the hold period. For realized investments, the firm reports average revenue growth exceeding 400% under ownership.
Consolidating Fragmented Healthcare Markets
Healthcare services remain fragmented in many subsectors. Physician practices operate independently. Surgery centers maintain local ownership. Specialty providers lack scale to negotiate effectively with payors.
This fragmentation creates consolidation opportunities. A well-capitalized platform can acquire independent operators, integrate them into a larger network, and capture benefits of scale: better payor contracts, shared administrative functions, and access to capital for facility improvements.
Reeve Waud identified this opportunity early. Since founding Waud Capital Partners in 1993, he has led or overseen more than 500 company acquisitions. Many of these transactions represent add-on acquisitions—smaller deals that expand existing platforms.
The buy-and-build model requires more than capital. Integration capabilities matter. Acquired companies must adopt common systems for billing, electronic medical records, and compliance. Staff need training on new protocols. Cultures must align or at least coexist productively.
GI Alliance Example: 2 States to 14 States
GI Alliance exemplifies Waud Capital’s consolidation strategy. The firm partnered with physician executives in 2018 to create a gastroenterology practice management platform. At formation, operations spanned two states.
Over four years, GI Alliance expanded to 14 states through physician group affiliations and acquisitions. The company became the largest independent GI practice management company in the United States. Physician count grew nearly five-fold during Waud Capital’s ownership.
In 2022, Waud Capital exited through a recapitalization valued at approximately $2.2 billion, with Apollo Global Management joining as a new investment partner. The transaction allowed Waud Capital to sell its controlling stake at a substantial valuation after a four-year hold period.
David Neighbours, Partner at Waud Capital, commented on the outcome, noting the firm’s pride in accomplishments achieved through partnership with GI Alliance physician partners and management. The growth from two states to 14 states demonstrated the potential of consolidating fragmented physician specialties.
Average Revenue Growth of 400%+ Under Ownership
Waud Capital reports that realized investments averaged revenue growth exceeding 400% during the firm’s ownership. This metric suggests the firm holds investments long enough for substantial value creation rather than pursuing quick flips.
A 400% revenue increase means a company generating $50 million in revenue at acquisition reaches $250 million at exit. This growth comes from organic expansion (new locations, service line additions) and acquisitions (adding complementary businesses).
Center for Vein Restoration provides another data point. Under Waud Capital ownership, the company expanded from 11 clinics to 44 clinics across eight states. This quadrupling of clinic count drove corresponding revenue growth.
Reeve Waud’s experience with buy-and-build strategies dates to his time at GTCR, where some portfolio companies were constructed through more than 30 acquisitions. That operational experience informed how Waud Capital structures platform investments and integration processes.
The firm typically takes control stakes, investing $75 million to $200 million in equity per transaction. Control ownership enables Waud Capital to implement add-on acquisition strategies without requiring approval from other investors or management teams who might prefer slower growth. This approach helps management teams address expansion challenges while building sustainable value over multi-year hold periods.
Related: Waud Capital Partners Names New Partners and Principals
