Here are 10 key points from the HealthCare Appraisers 2014 Valuation Survey.
1. The survey is based on responses from 25 ASC companies.
2. 47 percent of companies reported single specialty minority interest valuations of 3 to 3.9 times EBITDA. Multispecialty minority valuations were more along the lines of 4 to 4.9 times EBITDA.
3. 70 percent of companies reported single specialty majority interest valuations of 6 to 7.9 times EBITDA. For multispecialty centers, this 70 percent number rose to 78 percent.
4. A Certificate of Need increases valuation.
5. Out-of-network business reduces valuation. For many companies, out-of-network business in excess of 20 percent eliminates interest in a center.
6. 78 percent of companies indicated management fees of 5 to 6 percent of revenue. 20 percent indicate part of the management fee is at partial risk based on metrics. 80 percent indicate that no part of the fee is at risk.
7. Completing a sale transaction generally takes three to six months or more. A full sale takes longer than a sale of minority interests to physicians.
8. ASC billing and collections fees tend to range between 3 to 4.9 percent; i.e., 65 percent reflected this rate.
9. 52 percent of respondents had 10 or fewer ASCs under management. 40 percent of respondents bought no ASCs in 2013. 64 percent indicate they never manage without equity ownership.
10. Where a company has a minimum annual management fee, 60 percent set it between $100,000 and $199,000.
Learn more about the "HealthCare Appraisers 2014 ASC Valuation Survey" during a complimentary webinar featuring HealthCare Appraisers Partner Todd J. Mello, ASA, CVA, MBA, and Manager Nicholas A. Newsad, MHSA, on Thursday, April 17 at 1:15 p.m. to 2:15 p.m. CDT. Click here to learn more and register.
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1. The survey is based on responses from 25 ASC companies.
2. 47 percent of companies reported single specialty minority interest valuations of 3 to 3.9 times EBITDA. Multispecialty minority valuations were more along the lines of 4 to 4.9 times EBITDA.
3. 70 percent of companies reported single specialty majority interest valuations of 6 to 7.9 times EBITDA. For multispecialty centers, this 70 percent number rose to 78 percent.
4. A Certificate of Need increases valuation.
5. Out-of-network business reduces valuation. For many companies, out-of-network business in excess of 20 percent eliminates interest in a center.
6. 78 percent of companies indicated management fees of 5 to 6 percent of revenue. 20 percent indicate part of the management fee is at partial risk based on metrics. 80 percent indicate that no part of the fee is at risk.
7. Completing a sale transaction generally takes three to six months or more. A full sale takes longer than a sale of minority interests to physicians.
8. ASC billing and collections fees tend to range between 3 to 4.9 percent; i.e., 65 percent reflected this rate.
9. 52 percent of respondents had 10 or fewer ASCs under management. 40 percent of respondents bought no ASCs in 2013. 64 percent indicate they never manage without equity ownership.
10. Where a company has a minimum annual management fee, 60 percent set it between $100,000 and $199,000.
Learn more about the "HealthCare Appraisers 2014 ASC Valuation Survey" during a complimentary webinar featuring HealthCare Appraisers Partner Todd J. Mello, ASA, CVA, MBA, and Manager Nicholas A. Newsad, MHSA, on Thursday, April 17 at 1:15 p.m. to 2:15 p.m. CDT. Click here to learn more and register.
More Articles on Surgery Centers:
10 Things That Make ASC Board Meetings Inefficient
4 ASCs Performing Rare Pain Management Procedures
15 Statistics on ASC Days Operating Expenses