Solaris Health, a Fort Lauderdale, Florida-based provider of urological and other specialty services, is actively growing via M&A as it nears USD 1bn revenue, said Gary Kirsh, the president and CEO.

The Lee Equity Partners-backed company is not growing as fast as the previous three years via M&A, but it does still anticipate executing on urology acquisitions, said Kirsh. Solaris has a deep pipeline of M&A with targets in various stages of discussions, the CEO said. It has four deals under letter-of-intent (LoI) and anticipates closing on four or five deals by year-end, he said.

Solaris is a physician practice management platform building a network of urology and specialty services across the country.

The Southeast and Rocky Mountain regions have a number of potential opportunities, Kirsh said.

Solaris sees opportunities to acquire smaller urology practices that may not have ancillary services, which Solaris can provide, he said. Additionally, Solaris is interested in large physician practices as they become available, Kirsh noted.

Earlier this year, Solaris acquired the Chicago-area practice UroPartners and Lowcountry Urology Clinics, a Charleston, South Carolina-based provider of care services for women and men facing urinary and sexual disorders. In May, Solaris acquired Spokane, Washington-based Spokane Urology for an undisclosed amount. In 2021, Solaris acquired Advanced Urology Associates (AUA), a Joliet, Illinois-based provider of urological care services, Kirsh said. Physician practices retain their local brand equity post-acquisition, he said.

The size of deals could range from 10 to 15 providers or upwards of 100 providers, Kirsh said. This translates to enterprise values in the range of USD 10m to USD 20m or as large as USD 140m, he said.

Solaris finances deals with a combination of equity and debt, said Kirsh.

In the last three years, Solaris has seen 5x growth from M&A, he said. The company started with 100 providers and now has 700 providers across 13 states, he said.

Urology practice consolidation is in the third or fourth inning, he added.

Other private equity-backed urology groups include Audax-backed United Urology, New MainStream Capital-backed U.S. Urology Partners and Gauge Capital-backed Urology America, he said. United Urology reportedly paused its sale efforts in 2020 due to Covid-19. U.S. Urology Partners acquired Urology of Indiana earlier this year.

Solaris differs from the traditional “rollup” private equity model, explained Kirsh. Under Solaris, physicians maintain their local autonomy while benefiting from Solaris’ national infrastructure, Kirsh explained. Physicians retain 62% of equity of Solaris, while Lee Equity retains a controlling interest on the board, Kirsh noted.

Lee Equity formed Solaris Health in June 2020 through its acquisitions of The Urology Group, a Cincinnati-based provider of urological services, and Integrated Medical Professionals, a Farmingdale, New York-based urological services firm.

Solaris does not have an exit timeline with its existing financial sponsor, Kirsh said when questioned. First, Solaris has work to do in terms of back office and infrastructure support as well as additional growth targets, which he declined to disclose. Additionally, Solaris will likely wait for interest rates to “cool down” before moving forward with a recapitalization, he said. “Time will tell,” said Kirsh when asked if he would consider a full or partial recapitalization.

McDermott Will & Emery serves as its legal counsel. It does not work with buy-side investment bankers.