Apollo Backs $2.2 Billion Gastro Medical Practice GI Alliance

GI Alliance, the biggest gastroenterology practice in the US, is going to be taken over by a physician-led group in a deal that values the company at over $2 billion.

The minority equity stake in GI Alliance will be bought back by the physician owners. Apollo- managed funds are leading the investment. Two seats on the company's board are going to be given to the private equity firm.

An equity strip that includes preferred and common equity is being made by Apollo.

GI Alliance and its doctors have the power to make decisions at the medical practice. The previous arrangement gave the final say in the business to Waud Capital, even though GI and its physicians became majority owners.

Weber said in an interview that they weren't in total control. That was something that we didn't have.

Apollo's hybrid value business doesn't involve Apollo taking control of the company. The same vehicle has been used to invest in two other companies.

"This type of deal structure is unique, where it truly is partnership capital to a management team and physician ownership group, to allow them to accomplish their objectives but slot ourselves in neatly and be good partners but not necessarily control shareholders."

The GI Alliance has 700 gastroenterologists in 15 states.

At the end of June, Apollo had over 500 billion assets under management.

GI's management and physicians were advised by Greenhill & Co.