(Note: Responses indicate impact on implied EBITDA multiple. Very high=greater than 1.0X; High=0.5X-1.0X; Medium=0.25X-0.5X; Low=less than 0.25X; Very low=negligible impact)
Physician Risk
High level of ownership by physicians in competing centers:
Very high — 60 percent
High — 33 percent
Medium — 7 percent
Low — 0 percent
Very low — 0 percent
High reliance upon a few physicians to drive majority of value and revenue:
Very high — 53 percent
High — 40 percent
Medium — 7 percent
Low — 0 percent
Very low — 0 percent
Significant number of active physicians nearing retirement age:
Very high — 53 percent
High — 40 percent
Medium — 7 percent
Low — 0 percent
Very low — 0 percent
Market Risk
Existence in a state with certificate of need requirement:
Very high — 20 percent
High — 53 percent
Medium — 7 percent
Low — 20 percent
Very low — 0 percent
High level of competition from competing ASCs/surgical hospitals:
Very high — 7 percent
High — 53 percent
Medium — 27 percent
Low — 13 percent
Very low — 0 percent
Location in a market where hospitals are actively employing surgeons:
Very high — 20 percent
High — 40 percent
Medium — 27 percent
Low — 13 percent
Very low — 0 percent
Financial or Operational Risk
Expected growth in future periods:
Very high — 47 percent
High — 27 percent
Medium — 20 percent
Low — 7 percent
Very low — 0 percent
Lack of consistent, reliable financial & operational data reporting:
Very high — 27 percent
High — 20 percent
Medium — 47 percent
Low — 7 percent
Very low — 0 percent
Level of financial leverage (debt level):
Very high — 7 percent
High — 20 percent
Medium — 33 percent
Low — 40 percent
Very low — 0 percent
Legal or Partnership Risk
Lack of adequate non-compete covenants with physician owners:
Very high — 53 percent
High — 27 percent
Medium — 7 percent
Low — 0 percent
Very low — 13 percent
Lack of mandatory buy/sell provisions:
Very high — 27 percent
High — 40 percent
Medium — 7 percent
Low — 7 percent
Very low — 20 percent
More Articles on Valuation:
Dr. Naser Rustom to Open $5.5M Outpatient Surgery Center Catering to Islamic Faith
St. Vincent Anderson Regional Hospital to Build $26M Surgery Center
At the Becker’s 32nd Annual Meeting: The Business and Operations of ASCs, taking place October 29-31 in Chicago, ASC leaders, surgeons and healthcare executives will explore strategies to drive growth, enhance operational performance, navigate reimbursement challenges and prepare for the future of ambulatory surgery. Apply for complimentary registration now.
