April 2018: Prairie Capital VI, LP partnered with founder Dr. Jim Sublett, CEO Kay Tyler and other physician owners to recapitalize Family Allergy & Asthma (“Family Allergy” or the “Company”). Headquartered in Louisville, KY, Family Allergy is a leading provider of allergy, asthma, and immunology diagnosis and treatment services. Family Allergy currently operates 28 allergy clinics with 30 providers throughout Kentucky, Indiana, and Ohio and serves over 60,000 patients annually.
Family Allergy is a premier provider of allergy services in its markets. The Company provides patients a comprehensive suite of allergy and asthma service offerings, including immunotherapy, testing, general office visits and miscellaneous service offerings. Based on the Company’s large geographic presence, Family Allergy can reach patients more easily than competing allergy clinics via their “hub and spoke” model. This model allows Family Allergy to open smaller offices closer to the patient with flexible hours, ensuring a more efficient and convenient patient adherence for immunotherapy, which is critical given the high frequency visits the therapy requires.
The allergy services market is a large, fragmented and growing market that is expected to benefit from strong underlying demand drivers over the next 10 to 15 years. According to market research, approximately 26 million people in the U.S. suffer from allergic rhinitis (moderate to severe allergies), however only 6 million of those allergy sufferers see allergists. Of these patients, approximately 1.5 million receive allergy shots (known as immunotherapy) to treat their allergies. Immunotherapy has an extremely high success rate for patients who maintain the protocol, and better adoption should lead to additional growth. In addition, physicians continue to be attracted to larger platforms due to intense regulatory burdens, increased emphasis on flexibility and lifestyle for younger physicians, and improved negotiating power with payers. Allergy is one of the more fragmented physician specialties in the market, with over 70% of practices employing less than five physicians. The challenges these physicians face will likely drive consolidation, similar to what is taking place in other specialties such as dentistry, dermatology, and eye care.
Prairie Capital partnered with senior management to support and accelerate continued company-building investments in de novo site expansion, technology, human capital and add-on acquisitions.