How to Sell an Endoscopy Center

At the 18th Annual Ambulatory Surgery Centers Conference in Chicago on Oct. 28, Jon Vick, the founder and president of ASCs, Inc., provided a framework for preparing an endoscopy center for sale.

"We're seeing more GI center becoming for sale," he said. "The good news is that there are a lot of high-quality buyers."

Those buyers, which include the more than 30 ASC management companies, are looking for growth. That's how you're going to realize the maximum value for a center, Mr. Vick said.

There are typically six difference business models, he said.

1.    Sell 51% share to hospital for cash
2.    Sell 51% share to management company for cash
3.    Sell 51% in a three-way deal
4.    Sell 51% to an ASC management company for cash and stock
5.    Sell 30% to an ASC management company
6.    Sell 30% to an ASC management company that will help build the business for a second sale

Values can vary depending on the following factors:

1.    Age of physicians
2.    Percent out of network
3.    Recruitment pool
4.    Ability to expand center
5.    Availability of hospital partner
6.    Resale/Stock options opportunity

Mr. Vick said stock options tend to me worth more than cash. Recently, he has seen ASC center sales between 5.5-8 times EBITDA.

To maximize value of your ASC, he recommends the following:

1.    Recruit young physicians
2.    Identify recruitment pool of users
3.    Reduce the percent of out-of-network if it exceeds 25 percent
4.    Identify growth opportunities
5.    Identify center expansion opportunity
6.    Prepare a compelling sales prospectus that has all center's information

More Expertise From Jon Vick:

10 Signs Your Surgery Center is in Trouble
7 Ways to Position ASCs for Success
4 Questions to Ask Hospital Leaders Before Entering Into a Joint Venture


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