ASC M&A, real estate today: 3 key thoughts from Jon Vick

ASC Inc., president Jon Vick discusses his career with ambulatory surgery centers and where he sees the industry mergers and acquisitions, as well as ASC/MOB real estate, headed in the future.

Q: How did you get started with surgery centers?

Jon Vick: In 1983 I was selling yag and excimer lasers, tinted soft contact lenses and glass (yes, glass) IOLs. Our OPH clients started asking how they could build a Medicare-certified ASC to get their cataracts out of the hospital, increase their efficiency, provide a better experience for their patients and increase practice income. With two other partners we formed SurgiCenter Development Corporation to provide consulting services to ophthalmologists and other specialties and collected information from many sources and published a book on How to Develop your Own Outpatient Surgery Center. During the next 15 years we developed over 90 single- and multispecialty surgery centers and 25 GI/endoscopy center partnerships.

Q: What's the status of the ASC mergers and acquisitions market?

JV: Over the last few years we have seen significant consolidation in the ASC management company segment of the industry as well as a number of new entrants, and hospitals are now actively seeking to acquire lower cost ASC facilities. The net result has been an increase in acquisition activity, more competition to acquire centers, and consequently an increase in multiples being offered.

In addition private equity buyers have shown increased interest in buying centers and networks of centers due to the proven long-term profitability of ASCs and their sustainability in the face of a continually changing economic and reimbursement environment. The valuation of ASCs has also increased significantly as more assets are taken into account during the valuation process as well as the value of growth opportunities.

Q: How did it happen that you expanded your business into real estate too?

JV: Many of our ASC and GI endoscopy center clients own their ASC/MOB real estate, and this real estate was often purchased many years ago and improved by the physician-owners. The book value is now often far below what the market value is and the annual returns are usually only 2 percent to 3 percent.

ASC strategic partners are not interested in buying ASC real estate, but there are many real estate investors who are interested. In the current low interest rate environment there are more buyers than sellers. We found that we could help our clients sell their ASC/MOB real estate, realize a very attractive fair market value for it, and sell their ASC real estate at a significant profit, and with no personal guarantees on a long-term leaseback. Their ASC real estate is often now worth many times what the original cost was.

Complimentary valuations for both ASC businesses and ASC real estate are available by contacting ASCs Inc. at 760-751-0250 or e-mailing


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