(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
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