Private equity firms are increasingly buying pain management and spine platforms from other sponsors, signaling that the sector’s earliest roll-ups are reaching a new phase of maturity, according to bankers and advisors.

The trend mirrors that seen in the orthopedics space several years ago, when first-generation physician practice platforms changed hands among sponsors as businesses scaled and approached recapitalization windows.

“Pain and spine is where orthopedics was five or six years ago,” said Dana Jacoby, CEO and founder of health care consulting firm Vector Medical Group. “Of the 17 investor-backed platforms we track, half were formed in the last four years, and the earliest ones are now hitting their recap windows.”

A recent example is the April 2025 acquisition of Summit Spine & Joint Centers from MSouth Equity Partners by Wellspring Capital Management, since rebranded as Revelar Capital, for undisclosed terms. The Lawrenceville, Georgia-based company had already undergone two prior recaps, with Fulcrum Equity Partners investing in 2018 and MSouth in 2021, according to Jacoby.

Similarly, Cedar Pine, Cresset Partners and American Discovery Capital recapitalized American Pain Consortium in January 2024, six years after American Discovery first backed the platform, she added.

Summit has continued to add practices since its recap, acquiring Savannah Pain Management in January and partnering with Southeast Neurology & Pain Management in July.

The ownership transitions come as a relatively young consolidation story begins to mature. Only seven major pain and spine platforms existed before the pandemic, while another 10 have formed since, according to Gary Herschman, co-chair of the health care transactions group at law firm Baker Donelson.

Two of the newest, DxTx Pain & Spine, which partnered with investors in 2023, and US Pain Care, launched last year, already have 70 and 33 locations, respectively, Herschman said.

Both Jacoby and Herschman recently co-authored an industry white paper highlighting the uptick in investor interest.

Surgery center ownership drives buyer interest

The most sought-after groups are those that own ambulatory surgery centers (ASCs).

“Buyers aren’t underwriting professional fees. They’re underwriting the ASC and ancillaries,” Jacoby said.

“The groups commanding premium interest today have ownership in the surgery center, a clear site-of-service strategy, and the case mix to move injections, ablations and neuromodulation out of the hospital.”

That dynamic helps explain why pain and spine continues to generate strong buyer demand despite a slowdown across other physician practice management sectors.

Larger practices with a deep provider roster, affiliated ASCs, and multi-state operations draw the strongest interest, said Eric Yetter, managing director and healthcare team leader at FOCUS Investment Banking.

“Location is important,” he noted. “Buyers prioritize groups with room to grow in areas where it is easy to recruit providers.”

Kyle Brown, managing director at investment bank Brown Gibbons Lang & Company, said buyers also favor practices whose clinical quality does not depend on one doctor, along with integrated systems for electronic medical records, billing, marketing and finance.

“More attractive investable assets are not dependent on any one physician or provider,” he said. “It’s institutionalizing quality practice of medicine.”

Platforms dominate deal flow

PE-backed platforms making add-on acquisitions account for most dealmaking activity, although standalone private equity investors are also returning after a roughly three-year lull, dealmakers said.

“PE-backed platforms are the major buyers,” said Yetter.

Brown said sponsor interest in pain and spine has broadened alongside improving sentiment toward healthcare services investments generally.

“There is a rejuvenated interest from standalone private equity,” said Brown.

Some investors are pairing pain and spine practices with orthopedics as part of broader musculoskeletal strategies, Brown said.

National ASC operators remain active acquirers of surgery centers, many of them focused on pain management and spine, Herschman said. Surgery Partners formed a joint venture with Nevada Surgical Suites, a Las Vegas interventional pain ASC group, in December 2023.

By contrast, hospitals have played a limited role as buyers.

“Hospitals have by and large not been acquirers of these businesses,” Brown said.

Instead, hospitals have favored partnerships such as AdventHealth’s August 2024 joint venture with Neurosurgery One, a Denver-area neurosurgical and pain practice.

Valuation multiples stabilize below peaks

Valuations are currently stable but remain below the market highs reached several years ago, according to advisors.

Herschman estimated multiples of 6x to 8x EBITDA for smaller practices, 8x to 10x EBITDA for medium and larger practices, and sometimes higher for very large groups, with valuations largely unchanged from a year ago.

Yetter expects most medium and large practices to trade at 5x to 9x EBITDA, depending on size, durability and location. Across physician practice management, valuations have moderated somewhat since peaking around 2021, he said.

Brown said larger businesses with more than USD 10m in EBITDA command high single-digit to low double-digit multiples, rising to low-to-mid double digits for businesses with more than USD 20m of EBITDA.

Those levels remain about one turn below the high-water mark of five to 10 years ago, though valuations have risen over the past three years, he said.

Deal structures have remained generally consistent. According to Herschman, most buyers pay 60% to 70% in cash and 30% to 40% in rollover equity, often acquiring only a portion of affiliated ASCs.

Outpatient tailwinds

Favorable industry dynamics are helping the chronic pain care niche.

Demand is growing as the population ages, while interest in minimally invasive, non-opioid treatments in outpatient settings continues, Yetter said.

Positive reimbursement trends in the specialty are also helpful, noted Brown.

“Tailwinds like the NO PAIN Act and CMS add-on payments for non-opioid therapies make the outpatient interventional model more durable, and investors are paying attention,” Jacoby said. CMS add-on payments are additional reimbursements provided by the Centers for Medicare and Medicaid Services (CMS) on top of the base Medicare amount.

Yetter expects surgical spine to draw increased investor attention as CMS rulemaking moves cases from hospitals to ASCs.

“This will introduce opportunities to perform these cases more efficiently and profitably,” he said.

The next trades

Several assets with more than USD 10m in EBITDA are in the market or expected to launch in the next couple of quarters, Brown said.

Other platforms may pursue a “second bite” of their own after Summit’s recap, according to Jacoby.

The specialty remains significantly less consolidated than most other areas of medicine, with activity so far concentrated in small regional pockets, Jacoby said.

“The next wave will be about regional density and multi-state platforms filling in the map.”