Earlier this week, Merritt Healthcare principles Matt Searles, MBA, and Rich Searles were featured in a webinar called, “Anatomy of an ASC Transaction: What to Expect When Selling an Interest in Your ASC or Endo Center.” The webinar kicked off with the latest news on industry trends and the future of surgery centers.
“Merger and acquisition activity has picked up over the past few years,” said Matt Searles. “Primarily, this is a maturing industry; there are certainly willing buyers and attractive valuations that exist. Buyers include primarily national ASC companies and hospitals and on a limited basis insurance companies and private equity groups.”
The top motivation for the sellers includes:
• Strategic partnerships that can bring economies of scale
• Liquidity in the sale of a mature business at a compelling capital gains tax rate
• Concern over healthcare reform
• Potential increases in capital gains
The top motivation for the buyers includes:
• National companies: They have economies of scale and lower cost structure of individual acquisitions, thereby lowering effective multiples paid
• Hospital buyers: Alignment of interests with physicians and conversion of HOPDs that could result in higher rates paid thereby lowering effective multiple paid for the ASC
• Private equity buyers: Looking for investment platforms
• Insurance companies: Looking for platforms for care delivery at a lower cost
Matt Searles noted the most successful deals he has ever seen are the ones where he can work with surgery centers to optimize their best qualities. Also the surgeons should have a realistic idea of the surgery center’s value.
What motivation ideas do you practice at your surgery center? Thinking about selling interest in an ASC? Contact Greg Zoch for a consultation today!