Transactions

Digestive Health Institute merged with Pinnacle GI Partners, a H.I.G. portfolio company

TRANSACTION OVERVIEW: 

Digestive Health Institute (“DHI”) d/b/a Michigan Gastroenterology Institute, Capitol Colorectal Surgery, and Greater Lansing Anesthesia Services, the leading gastroenterology and colorectal health services provider in mid-Michigan, has merged into Pinnacle GI Partners, a portfolio company of H.I.G. Growth Partners.  The combination creates the largest provider of gastroenterology and related services in Michigan, with 24 physicians serving 20 locations.

BACKGROUND:

Like so many providers, the shareholders of Michigan Gastroenterology Institute (“MGI”) recognized that the cost and complications of running a healthcare business are increasing every year. 

Increased regulation, pressure on reimbursement and a dwindling pool of physicians presented new challenges for the long-term success of the practice and the needs of their patients. 

To maintain the highest quality of care and offer long-term economic benefits to current and future physician shareholders, MGI realized they needed to grow.  To that end, they understood they needed to acquire other practices or join with another practice to achieve the scale to address growing cost pressures.

With this foundation, MGI engaged Cascade Partners to evaluate what options were available to the practice, what the impact of each would be to the practice and the shareholders and what would they have to do to execute each of the options.

The team at Cascade Partners devised a strategy to achieve the shareholders’ goals.  Initially, Cascade assisted in merging Capitol Colorectal, a key referral source and long-term clinical partner, into MGI to form Digestive Health Institute (“DHI”), the only provider in the region offering complete digestive clinical care.

During this process, Cascade recognized the increased burden and complexity of the new organization would require additional management.  Through its network, Cascade was able to introduce DHI to a new CEO.  

With a new CEO and expanded scope, Cascade developed a strategy to find a partner that could help build on the practice’s success.

The Cascade Partners’ team secured multiple offers of varying structures and complexities, each of which was reviewed with the shareholders to determine the best long-term fit. 

After analyzing the varying alternatives and meeting with several potential partners, the shareholders decided that joining Pinnacle GI Partners and its growing Michigan presence was the best option to achieve their goals and objectives.

Cascade Partners served as the exclusive financial advisor to Digestive Health Institute.