Is Now a Good Time to Sell your Ambulatory Surgery Center (ASC)?

by John Clark, CEO, Clark Health, LLC

Physicians often ask the question, “Is now a good time to sell a percentage of my ASC?”. The answer can be divided into two parts: 1) What is the market like? and 2) How is my ASC performing?

Let’s start with addressing the first question. ASCs have been around for more than forty years. I have been involved in this business for more than 17 years, and during my 17 years there has never been a “bad” time to sell a portion of your ASC. So, is now a good time to sell? Yes, now is a good time. The market currently has multiple buyers including Hospitals (Health Systems), National Management Companies, and Private Equity (PE). These buyers vying for partnerships with centers are helping to keep the value of your ASC high. Multiples* are consistently in the 7–9 range, and PE companies will go higher if they deem your ASC/Practice as a regional platform.

The second question depends on the financial health of your specific ASC. Corporate partners are analyzing operational factors such as: number of operating/procedure rooms, number of physician owners and their ages, approved specialties, case volume, payer mix, is the center in network with the major payers in their area, is the ASC in a Certificate of Need state, and what is the trend of your ASC (is it growing in volume and profit year over year, is it flat, or is it declining, etc.). Analysis of these indicators will help determine the sale value, draw specific partners depending on growth potential and...

If you are ready to sell a portion of your ASC, believe it might be time to sell in the near future, or just want to investigate the possibilities of a sell, please reach out to us. With our experience in the ASC buy/sell space, we will work to ensure you receive the maximum value for your ASC while maintaining control over the areas that are important to you.

* Multiples are used in valuing ASCs for sale and are factors applied to Earnings before interest, taxes, depreciation and amortization (EBITDA). For example, if your ASC has an EBITDA of $1M, with an applied 8 multiple, the ASC value would be $8,000,000.