At the 18th Annual Ambulatory Surgery Centers Conference in Chicago on Oct. 28, a panel discussion featuring four ASC development leaders discussed some of the current trends in the ASC merger and acquisition market. Panelists included Patrick Richter, vice president of business development at United Surgical Partners International, Blayne Rush, president of Ambulatory Alliance, Michael Weaver, vice president of acquisitions and development for Symbion Healthcare, and Matt Searles, managing director of Merritt Healthcare.
Mr. Richter said the M&A market within the ASC industry is very competitive right now. He said most ASCs he's seen are selling in multiples of four or five times earnings before interest, taxes, depreciation and amortization. Mr. Searles added that multiples of seven or 7.5 times EBITDA are the highest he's seen.
Mr. Rush echoed those trends and added that there has been a growing interest from hospital buyers to acquire ASCs and potentially turn them into hospital outpatient departments, especially as the demand for outpatient care rises and inpatient care decreases.
So what are buyers looking for in an ASC, and what type of ASCs are sellers trying to market? Mr. Weaver said multispecialty ASCs with more physicians that are in-network are the main catch. "There's more risk buying a practice with only two physicians, so you try to diversify as much as possible," Mr. Weaver said. Mr. Rush added that ASCs heavy with orthopedics, ASCs that have at least three operating rooms and ASCs that can do 4,000 to 6,000 cases per year are also ideal in the M&A market.
Will Private Equity Groups Invest in Surgery Centers: 6 Thoughts From Ambulatory Alliances' Blayne Rush
Who Can Pay More for a Surgery Center: Hospital or Management Company?
Mr. Richter said the M&A market within the ASC industry is very competitive right now. He said most ASCs he's seen are selling in multiples of four or five times earnings before interest, taxes, depreciation and amortization. Mr. Searles added that multiples of seven or 7.5 times EBITDA are the highest he's seen.
Mr. Rush echoed those trends and added that there has been a growing interest from hospital buyers to acquire ASCs and potentially turn them into hospital outpatient departments, especially as the demand for outpatient care rises and inpatient care decreases.
So what are buyers looking for in an ASC, and what type of ASCs are sellers trying to market? Mr. Weaver said multispecialty ASCs with more physicians that are in-network are the main catch. "There's more risk buying a practice with only two physicians, so you try to diversify as much as possible," Mr. Weaver said. Mr. Rush added that ASCs heavy with orthopedics, ASCs that have at least three operating rooms and ASCs that can do 4,000 to 6,000 cases per year are also ideal in the M&A market.
Related Articles on ASC Transactions and Valuation:
How to Sell an Endoscopy CenterWill Private Equity Groups Invest in Surgery Centers: 6 Thoughts From Ambulatory Alliances' Blayne Rush
Who Can Pay More for a Surgery Center: Hospital or Management Company?