After the Deal: Keystone Urology and Solaris Health

Introduction

In September 2024, Keystone Urology entered into a healthcare private equity partnership with Solaris Health Partners, a leading national urologic care platform backed by Lee Equity Partners. Based in Lancaster, Pennsylvania and serving the greater Central Pennsylvania region, Keystone Urology Specialists was established over 55 years ago and grew into the leading independent urology practice in its market with 17 providers, four clinic locations, an ambulatory surgery center, and a full suite of surgical, medical, and ancillary urological services. The practice had long been the preeminent provider of urological care in the state, garnering accolades from the US News and World Report as a top practice in both Pennsylvania and the country.

Client Background

Keystone Urology pursued an investment banking transaction for many of the common reasons seen across physician-led groups: to allow its partners to take some chips off the table through a liquidity event, strengthen its market position, improve back-office support, and accelerate the expansion of ancillary service lines with the help of a scaled, well-capitalized partner.

Like many independent practices, Keystone had faced growing challenges in provider and staff turnover, recruitment, revenue cycle management, credentialing, and payer negotiations – all of which had diverted attention away from clinical care. The increasing administrative burden was impacting partner lifestyle and long-term sustainability. Recognizing that these issues could be alleviated through the right partnership, the group chose to engage Physician Growth Partners, a leading healthcare investment bankers, to guide them through a strategic private equity transaction process.

Transaction Overview

PGP ran a highly targeted investment banking process tailored to the full universe of relevant urology private equity buyers. The process highlighted Keystone’s strong clinical footprint and growth trajectory, including post-close initiatives already underway. Physician Growth Partners strategic positioning and detailed marketing materials generated strong interest from the leading private equity-backed urology platforms.

After thorough diligence and in-person meetings with management teams, Keystone ultimately selected Solaris Health Partners, a national leading urological private equity backed group, based on shared values, local infrastructure, and alignment around delivering market-leading care. Solaris’s presence and execution capability within Pennsylvania further solidified their fit as the ideal long-term partner.

PGP also helped Keystone navigate several transaction complexities, including managing near-term retirements within the shareholder base and integrating a lithotripsy joint venture previously held outside the core business. Every transaction has unique elements, and PGP helped drive value while ensuring a seamless and mutually successful outcome for all parties involved.

Outcome & Impact

Seven months post-close, Keystone is already seeing the benefits of its healthcare private equity partnership. Solaris has brought meaningful enhancements to back-office support, revenue cycle management, and credentialing, allowing Keystone to scale more efficiently. Their scale has enabled stronger payer negotiations and created new growth opportunities – including support for potential acquisitions and capital to expand previously underdeveloped services, such as catheter dispensing.

The private equity partnership has already proven to be a strong cultural and operational fit. Keystone is energized by the progress to date and confident that Solaris will continue to support its mission to deliver exceptional urologic care across Pennsylvania.

Conclusion

For physicians looking for further assistance in the ever challenging livelihood of independent practice, a strategic partnership can help grow the practice by improving operations and aggregating scale and shared resources, while allowing the physician shareholders to focus on maintaining and improving patient care. This can translate to further growth and success for the practice, their patients and the community.

If you’re a founder or shareholder of an independent physician practice wondering if private equity is a fit for your practice or want to better understand a healthcare investment banking process, please fill out the form below and one of our healthcare advisors will be in touch with you shortly.