About Your Urgent Care Center
68. Is there an established method of valuing an Urgent Care business for the purpose of a purchase/acquisition? Is it a multiple of EBITDA as is typical in other healthcare entities or some other method? Any help you can offer would be greatly appreciated. I look forward to your response.
Urgent care centers are often valued, just like many other businesses, via a capitalization of historical earnings or cash flow method (often expressed as a “multiple of EBITDA”). Of course, one may need to make adjustments for inadequate or excess reserve accounts, intangibles, leases, extraordinary items and management compensation, etc. For a multiple center location, multiples up to 6x EBITDA can be seen. For a single urgent care center, multiples as low as 2-3x may be more likely.
Another method that could be used (but rarely is in real practice) may include discounted cash flow (based on value of cash flows that the urgent care can generate over its forecasted remaining useful life). I don’t believe there are any relevant publicly-traded companies or publicly available statistics on other urgent care sales to use for a comparison valuations (Guideline company multiples).
One way to increase the value of an urgent care is to optimize billing and coding. Our company Practice Velocity has been able to help many centers double their profitability almost overnight by improving efficiencies in billing and coding.
We specialize in helping urgent care centers achieve peace-of-mind profitability through cutting-edge coding and billing software solutions. With over 800 urgent care centers in 50 states, Practice Velocity now serves more urgent care centers for charting and coding than all other systems combined.