Houlihan Lokey Advises Arizona Centers for Digestive Health

Houlihan Lokey is pleased to announce that Arizona Centers for Digestive Health, PLLC (AZCDH), has completed a recapitalization transaction and growth capital partnership with Covenant Surgical Partners, Inc. (Covenant), a portfolio company of Kohlberg Kravis Roberts & Co., LP (KKR). The transaction closed on July 1, 2019.

Founded in 2017 by former Mayo Clinic physicians, AZCDH is Arizona's largest provider of end-to-end gastroenterology care. AZCDH provides general and subspecialty care to more than 71,000 patients annually through their 28 providers across 11 practices, spanning from Phoenix, Glendale, Scottsdale, Avondale, Gilbert, Mesa, Maricopa, and Queen Creek. Currently, AZCDH employs 17 fellowship-trained, board-certified physicians. As the only Arizona gastroenterology group with an advanced fellowship program and the first group in the United States to perform outpatient endoscopic ultrasounds in a stand-alone ambulatory surgery center, AZCDH leads the market with its innovative and cost-effective care. The organization is a key gastrointestinal partner for multiple hospitals across the region.

Headquartered in Nashville, Tennessee, Covenant is a privately-held physician services company that owns and operates a variety of healthcare facilities including ambulatory surgery centers, anesthesia companies, anatomic pathology labs, and physician practices. The company was founded in 2008 with the strategic objective to become one of the foremost physician services companies in the U.S. by partnering with leading physicians, particularly in the areas of gastroenterology and ophthalmology.

KKR is a leading global investment firm that manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate, credit and, through its strategic partners, hedge funds. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and driving growth and value creation with KKR portfolio companies. KKR invests its own capital alongside its partners' capital and provides financing solutions and investment opportunities through its capital markets business.

Houlihan Lokey served as the exclusive financial advisor to AZCDH. This transaction highlights Houlihan Lokey's continued leadership within the physician practice management and retail healthcare sector, having closed 40 transactions in this space since 2016, including 11 transactions over the past twelve months. Houlihan Lokey's Healthcare Group is among the largest dedicated healthcare investment banking groups in the country. In 2018, Houlihan Lokey was ranked the No. 1 M&A advisor for all U.S. healthcare transactions by Thomson Reuters.


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