Trends in Surgery Center Deals – Options to Consider
November 17, 2009 by Ann Deters
Filed under Industry Updates
For the third quarter 2009, Irving Levin Associates recently reported that in the hospital and surgery center deals saw a substantial increase. The hospital sector saw the biggest uptick with 21 deals announced in the 3rd quarter. The big news is that this is the highest volume in eight years with 27 deals announced in the 4th quarter of 2001.
According to Jerry Sokol of McDermott Will and Emery, they are seeing more facilities merging to increase profitability. In addition, in some cases the valuation based on EBDITA (earnings before depreciation, interest, taxes and amortization) is decreasing, due to lower EBDITA multiples being used , i.e. multiples of 6 versus 7 over the past years. However, there are situations where surgery centers are seeing higher multiples. These typically involve healthcare systems who are interested in putting the ASC under their preferred provider umbrella. Another circumstance might be where ASC possesses a hard-to-get CON license.
With the credit market opening up and Medicare reimbursements getting squeezed more, surgery centers should be looking at their merger and acquisition options. For some physician owners, this could be a welcomed relief for consolidating the revenues of various facilities, reducing their overhead costs, minimizing risks and perhaps increasing distributions.
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A post by "Ann Deters" http://www.VantageOutsourcing.com Ann Deters passion is to be an advocate for hospitals and surgery centers, allowing them to maximize profits by providing cataract outsourcing services in an efficient and low cost manner. Ann, has been a columnist about health care issue for two decades writing for numerous health care magazines. |
