Buyout Rates

February 1, 2006

What is the going rate for buyout of ambulatory surgery centers? I know that this is usually based on multiples of earnings or EBITDA (earnings before interest, taxes, depreciation, and amortization) minus debt, but I would like to know what the going multiples number is.

Question: What is the going rate for buyout of ambulatory surgery centers? I know that this is usually based on multiples of earnings or EBITDA (earnings before interest, taxes, depreciation, and amortization) minus debt, but I would like to know what the going multiples number is.

Answer: There are many mitigating factors, including the number and types of cases, payer mix, how many shareholders, capacity, and so on, but a decent standard for a minority shareholder buyout is 3 to 5 times EBITDA or 0.8 to 1.2 times revenue.