“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
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.