Valuing an Urgent Care Center for an Acquisition
Client/Profile
A multi-hospital health system
Challenge/Situation
To determine the fair market value of a physician-owned and -operated urgent care center to support a purchase offer by the health system.
The urgent care center had not yet fully achieved financial stabilization due to its relatively short history and recent expansion of operating hours.
Process
Veralon prepared five-year projections and a discounted cash flow statement for the urgent care center. We relied primarily upon the income approach to determine fair market value. We also prepared cost and market-based valuations to develop and support our fair market value conclusion.
Results
We conducted sensitivity analyses on insurance payment rates to increase the buyer’s confidence about it its commitment to acquire the center.
Our valuations allowed the health system to support an offer to acquire the urgent care center.