Urgent Care Valuation Multiples
Are you planning to buy, grow, or sell an urgent care center? Determining the center’s fair market value is a key step to strategic decision-making. With this information, urgent care owners can take proactive steps to maximize the business’s value and achieve objectives. One of the easiest ways to get a broad fair market value estimate is to use urgent care valuation multiples.
In this article, we discuss the most common valuation multiples for urgent care centers. These tools provide a helpful initial estimate of an urgent care’s worth. However, valuation multiples may overlook the unique circumstances of your specific urgent care center. For the most accurate results, it is best to obtain a professional urgent care valuation from an experienced business appraiser.
At Peak Business Valuation, we frequently help individuals preparing to buy, grow, or sell urgent care centers. We are here to provide you with an accurate and timely business appraisal for an urgent care! In addition, we can answer any questions you may have about valuation multiples. Schedule a free consultation with Peak Business Valuation to get started!
What Are Urgent Care Valuation Multiples?
Valuation multiples are financial ratios that help calculate the fair market value of an urgent care center. These multiples are typically derived from key metrics such as earnings or revenue. To identify applicable urgent care valuation multiples, business appraisers analyze recent sales data from similar businesses. For privately owned centers, data is pulled from private transaction databases. To learn more, see Valuation Multiples for an Urgent Care Center.
Common Urgent Care Valuation Multiples
When valuing an urgent care center, Peak Business Valuation commonly uses valuation multiples based on SDE, EBITDA, and revenue. Each of these methods offers a unique perspective on the center’s value. As such, a business appraiser may apply multiple methods to reach a more comprehensive estimate. Below, we explain each type of multiple and typical ranges observed in the urgent care industry.
SDE Multiples for an Urgent Care Center
Seller’s Discretionary Earnings (SDE) reflects the total financial benefit an owner receives from the urgent care. This measure is common when valuing smaller urgent care centers. SDE is determined by adding back personal, non-operating, and one-time expenses to net income.
Formula: Business Value = SDE × Multiple
Range: Urgent care centers commonly sell for 2.40x to 4.22x SDE.
EBITDA Multiples for an Urgent Care Center
EBITDA refers to Earnings Before Interest, Taxes, Depreciation, and Amortization. This valuation method is especially useful for larger urgent care centers or those with multiple locations. EBITDA provides insight into a center’s operational performance and enables easy comparisons across similar businesses.
Formula: Business Value = EBITDA × Multiple
Range: Urgent care centers generally transact within a range of 3.00x to 5.58x EBITDA.
Revenue Multiples for an Urgent Care Center
Revenue multiples estimate fair market value based on the total revenue the urgent care center generates in a year. While this method highlights the business’s size, it does not capture profitability. As such, valuation experts typically give more weight to income-based multiples like SDE and EBITDA.
Formula: Business Value = Revenue × Multiple
Range: On average, urgent care centers sell between 0.60x and 0.90x revenue.
As a professional business appraiser, Peak Business Valuation applies valuation multiples during a comprehensive urgent care valuation. In addition to these benchmarks, we consider the center’s strengths, weaknesses, market conditions, and more. If you need a precise and defensible business valuation for an urgent care, we are happy to help! Schedule a free consultation below!
How to Value an Urgent Care Center Using Multiples
Valuation multiples are a quick way to estimate how much an urgent care center may be worth on today’s market. However, an accurate valuation requires professional guidance. A certified business appraiser applies the most relevant multiples alongside a thorough analysis of dozens of factors. Additionally, weighted averages may be applied to smooth out financials. Check out How to Value an Urgent Care for more information on the valuation process.
Rules of Thumb for Urgent Care Centers
SDE, EBITDA, and revenue multiples are common rules of thumb for evaluating urgent care centers. While these simplified methods can provide helpful insight, they do not replace a comprehensive business appraisal. If you need a defensible valuation, it is best to consult with a certified business appraiser. Reach out to Peak Business Valuation today for more guidance.
Factors Affecting Urgent Care Valuation Multiples
Several key factors can influence the multiples applied when valuing an urgent care center. Understanding these variables can help owners enhance the urgent care center’s value and mitigate risks. Here are a few common elements to consider:
- Location: Urgent care centers located near dense populations tend to experience higher patient volume and revenue, promoting stronger multiples.
- Skilled Workforce Availability: Employing and retaining skilled medical and administrative professionals ensures consistent, high-quality patient care. This helps boost patient satisfaction and supports higher valuation multiples.
- Technology & Operational Efficiency: Urgent care centers that implement advanced healthcare technology can reduce costs, improve productivity, and enhance the patient experience. These factors can have a major effect on the value of an urgent care center.
- Industry Reputation: Securing endorsements from respected organizations can increase patient trust, attract talent, and help the center qualify for government and private insurance programs. This raises the perceived value of an urgent care.
For further insight, see Value Drivers for an Urgent Care Center.
Conclusion
Urgent care valuation multiples are a helpful starting point when estimating the value of an urgent care center. However, these figures only reflect general market trends. To accurately determine the fair market value of a specific urgent care, consider working with a professional business appraiser. During a business valuation, these valuation experts account for the business’s unique strengths, challenges, and opportunities.
If you need a business valuation for buying, growing, or selling an urgent care, Peak Business Valuation is here to assist! We work with urgent care centers throughout the nation. We are happy to provide you with a business valuation or answer any questions you may have. Schedule your free consultation by clicking below!
For additional insights, see Urgent Care Valuations and Valuing an Urgent Care.
