CPI, located in Austin, Texas, was founded in 2007. This physician-led practice is comprised of six locations that provide individualized pain treatment programs using therapies including spinal cord stimulation, pain management injections and medication management. CPI also owns the Center for Specialty Surgery of Austin (CSSA), which opened in 2015. It is a licensed, multi-specialty ambulatory surgery center that offers services in pain management, neurosurgery, ophthalmology and podiatry.
New State Capital Partners, headquartered in Larchmont, N.Y., is a private equity firm focusing on growth and add-on investments in the areas of healthcare services, business services and industrials. The firm has approximately $400 million in assets under management.
“Over the past decade, CPI has established itself as a leading provider of cutting-edge pain management — and other specialties through CSSA — to the rapidly growing Austin area,” says Robert Goettling, Principal at The Bloom Organization. “The investment in CPI will help expand the practice and CSSA while improving their ability to serve the increasing patient population.”
With its multiple locations, CPI is representative of a growing trend in the United States. “Large group practices are forming throughout the country in order to adapt to changes in healthcare,” says Goettling. “Smaller groups cannot survive the demands and challenges of increasing regulatory requirements, changing reimbursement models (e.g., payment for quality as opposed to pure fee for service) and new technology.”
The investment in CPI was a private equity-backed transaction. Private equity continues to have a strong appetite for specialty platforms, such as pain management, orthopedics and gastroenterology.
DLA Piper also served as an adviser to CPI while Morgan Lewis provided counsel to New State Capital Partners. Terms of the transaction were not disclosed.