3 ASC Transaction Trends: Q&A With Dr. Stacey Berner of SurgCenter Development
Question: What is the going price for a majority interest in an ASC?
Stacey H. Berner, MD, President and Principal of SurgCenter Development: Price [for a majority interest in an ASC] varies based upon financial performance; however, we are seeing valuations of 6.5 times to 8 times EBITDA minus outstanding debt.
Q: What is the trend in ASC transaction volume over the last year?
Dr. Berner: There has been an uptick of activity, which began in the fourth quarter of 2012 and has continued through the present. Overall transaction volume will likely be up by the close of 2014 as compared to 2013.
Q: Who are typical ASC buyers?
Mr. Berner: ASC companies as well as ASC company-hospital system joint ventures represent the two largest categories of buyers, followed by hospitals. The off-loading of eligible cases from hospital campuses (inpatient and hospital outpatient) to the freestanding ASC setting is increasing in many regions. This has fueled the interest of hospitals and hospital systems to enter into relationships with ASCs. Likely there will be an increase in direct hospital acquisitions of ASCs in the intermediate to long term, and we are starting to see this in certain parts of the country. However, our experience with entities currently in the market to acquire ASCs suggests that this category lags behind ASC companies and joint ventures.
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