Private equity and real estate firm American Development Partners (ADP) has agreed to invest $1 billion into American Family Care (AFC), the largest operator of urgent care centers in the U.S, to accelerate its expansion plans.
The funding, which will cover costs such as land acquisition and purchasing new equipment, could add as many as to 300 new locations to AFC’s more than 170 existing clinics, with the equity firm getting back its investment by collecting lease payments from AFC franchisees.
"Our new relationship with ADP not only helps us toward achieving our mission of providing the best health care possible at times and locations convenient to the patient, but also helps us to serve the needs of local business people interested in joining the health care revolution, by giving them access to capital and expertise to start and/or grow their businesses," AFC CEO Bruce Irwin, MD, said in a press release.
The deal won’t change AFC’s ownership, as the press release states the company will continue to invest in new franchises on its own.
Targeted areas for expansion include Florida, Georgia, Illinois, Indiana, Kentucky, Maryland, Michigan, Missouri, Ohio and Texas, which the equity firm identified as likely to see increased demand for outpatient care offered by urgency care centers as insurers and large purchasers look to them to avoid costs of higher-priced hospitalization.
Healthcare providers like Partners Healthcare and Texas Children’s Hospital have recently made moves to expand their urgent care networks, with the expectation that those kinds of outpatient services will drive profitable growth in the near future.