M&A Advisory for Healthcare Companies
Sica | Fletcher has been consistently ranked the #1 sell-side M&A firm in its industry by S&P Global since our founding in 2014. Our services hit on several key value areas for healthcare company owners interested in an M&A deal:
- Working closely with owners to ensure a smooth deal process
- Maintaining relationships with strategic acquirers and PE firms to identify the best buyer
- Employing our extensive industry knowledge to secure the highest possible payout
Healthcare business owners can sometimes underestimate the complexities of running an M&A process themselves or through an in-house consultant. The reality is that without an experienced advisory firm, these companies are subject to a litany of missed opportunities and legal risks that result in a prolonged deal process and a lower valuation, as shown in the EBITDA multiples statistic below:
Average EBITDA multiple for self-represented companies
Average EBITDA multiple for companies represented by an M&A advisory firm
Healthcare Valuation Multiples
The charts below depict EBITDA and revenue multiples for private healthcare companies as of Q4 2023. We broke down both by healthcare subsector, with each depicting a value range to indicate low and high multiples for each.
In the case of these lower multiples, our research team identified three central causes:
- The company was self-represented
- The company had a high employee turnover
- The company had poor invoicing and payment processing practices
EBITDA Multiples for Private Healthcare Companies
Revenue Multiples for Private Healthcare Companies
M&A Advisory for Healthcare Companies in 2023
Healthcare companies are in a unique position compared to other industries in M&A; even non-essential healthcare services saw only minor reductions in EBITDA multiples, averaging -13%, during the economic downturn of 2022. Over 2023, our team has seen those multiples steadily rise to near pre-pandemic levels, making healthcare one of the first industries to do so.
Where we have noticed issues, however, is in deal volume, which has declined nearly 20% across the board between Q3 2022 and Q4 2023. This is especially true for larger companies, which saw a decline close to -28%. However, even smaller healthcare providers face the challenge of incredibly discerning buyers in today’s market. For companies serious about selling their company, starting your relationship with our team now will help secure your company the best possible payout.