Selling Your Urgent Care Clinic
Like many other types of medical practices, there are several types of buyers who may be interested in purchasing an Urgent Care Clinic. There are three main groups who are interested in buying a clinic. Let’s take a look at each one in detail.
National and Regional Aggregators.
Consolidation was widespread last year, with some well-known corporations gathering up many clinics spread over multiple regions of the country. National and regional aggregators are driving increased activity in mergers and acquisitions, and these major players have collected larger mid-sized medical practice companies, like those with several dozen clinics in their system. However, these aggregators have few opportunities remaining in the 10-30 clinic organizations range, so they now are concentrating on 5-10 clinic groups to fill in gaps in their coverage areas or to increase their geographic presence.
Private Equity Investors.
Private equity groups continue to see the financial opportunity of urgent care clinics. These groups have supplied capital to help facilitate vertical integration of existing medical practices with urgent care services. This type of move expands a practice’s available services and increases its value. Private equity investors believe that it’s a seller’s market, and that it’s here to stay for a while. This consolidation process, investors contend, is likely to continue for at least another 10 years, perhaps longer. With that in mind, private equity investors may focus on smaller groups with 1-3 clinics with the goal of aggregating them into a larger 5 to 10-clinic organization to set themselves up to be purchased by a national aggregators. These investors may also be looking to create a regional system in an under-serviced area to meet increased consumer demand.
Health and Hospital Systems.
Lastly, health and hospital systems are making acquisitions of urgent care clinics. These systems want to improve their coverage area, maintain brand recognition with the consumers, drive patients to their facilities, and, of course, up their bottom line. Health Systems are looking for successful urgent care owners to acquire operational expertise and management skills, as they expand their footprint geographically or attempt to cut costs by working at a larger commercial scale.
Valuations are high and profitability based on the fact that the Affordable Care Act is bringing in millions of newly insured clients every year, and the demand for urgent care continues to increase. Urgent care facilities typically provide many of the same services that patients might find in an emergency facility at around 10 to 50% of the cost. New urgent care clinics continue to increase in number due to limited regulation and low requirements to enter the field. These all-time high valuation levels attract buyers from insurance payors, health systems, private equity, big operators, and other segments of the healthcare industry.
Regardless of the type of buyer, purchasers are looking for well-developed profitability and a strong element of potential growth. For example, if your clinic has opportunities for new initiatives, lowering costs, or reducing staffing expenses, it may improve its perceived value. Likewise, if you have steady referrals, targeted marketing programs, and other strategies that evidence reliable income, buyers need to know about it.
Your primary task in this process is preparation. Make certain that your clinic is in tip top condition and express your ideas for ways to expand your services to further demonstrate the potential for growth. Buyers will want to see that financial potential. That’s why teaming up with an experienced business broker like Andrew Rogerson can help you prepare for an effective sale of your practice.
To discuss selling your medical practice in the Sacramento area, visit our website Services and choose from the drop down menu the information you’d like.
For more immediate help, please send an email to Andrew or call our office at (916) 570-2674.