(Reuters) - American Development Partners, a private equity and real estate firm, has agreed to invest $1 billion alongside American Family Care, the largest operator of urgent care centers in the United States, to expand its franchises, the company said on Thursday.
The agreement will fund the growth of an additional 300 American Family Care urgent care franchises throughout the United States, more than doubling its existing footprint of more than 170 clinics, according to the company.
American Family Care will remain owned by its founders. It will continue to invest its own capital in new franchises and wholly owned clinics.
American Development Partners will finance the acquisition and development of land for the urgent care centers, and will purchase equipment and provide working capital. It will recoup its investment by collecting lease payments from franchisees.
“This isn’t a private equity infusion per se,” said William Koleszar, chief marketing officer at American Family Care in an interview.
“It’s private capital working with small business owners to make healthcare more accessible to local communities.”
The new facilities will be primarily focused in states that American Family Care considers likely to have strong uptake of urgent care centers, ranging from Florida, to Illinois, to Texas.
Birmingham, Alabama-based American Family Care was founded by Bruce Irwin and now serves more than 3 million patients per year.
Urgent care has benefited in recent years by a drive by insurers and health providers to cut costs.
Based on the same principles as retailers, urgent care centers aim to offer a cheaper and more efficient alternative to visting a doctor’s office or emergency room.
They typically promise to service patients on a walk-in basis and accept payments for services like x-rays or stitches from people with or without health insurance.
Earlier this year, buyout firm Warburg Pincus LLC acquired a majority stake in urgent care provider CityMD, valuing it at around $600 million, Reuters reported.
Reporting by Carl O'Donnell in New York; Editing by Richard Pullin