“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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