ASC valuation multiples are on the rise

BVWireIssue #139-5
April 30, 2014

Buyers are paying higher multiples for controlling interests in ambulatory surgery centers (ASCs), according to the 2014 ASC Valuation Survey from HealthCare Appraisers Inc.

Prevailing rates: When purchasing a controlling interest in a single-specialty ASC, 70% of the respondents reported prevailing valuation multiples of 6.0 to 7.9 times EBITDA, while 30% reported lower valuation multiples ranging from 4.0 to 5.9 times EBITDA. This is comparatively higher than the previous survey, in which 57% of respondents reported valuation multiples of 6.0 to 7.9 times EBITDA for controlling interests in single-specialty ASCs, while 43% reported lower valuation multiples ranging from 3.0 to 5.9 times EBITDA.

Multiples for controlling interests in multispecialty ASCs are also higher according to the survey, which received responses representing well over 500 ASCs throughout the country.

Acquisition activity is expected to remain high this year, as 68% of respondents plan to purchase between one and five ASCs, 16% plan to purchase between six and 10 ASCs, and 4% plan to purchase 16 ASCs or more. Twelve percent of respondents are not planning to purchase any ASCs over the next 12 months.

ASC valuation webinar: Get some insight on ASC valuation from a recent webinar, Valuing Ambulatory Surgical Centers, featuring Todd Sorensen and Kevin McDonough (both VMG Health), two veteran valuation experts in this field.

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