Hey everyone, Happy Thanksgiving.
I’m looking to get some education from anyone who’s done outpatient mental health practice M&A.
We currently own three outpatient therapy clinics in central NJ. We’re part of a franchise system with cpom regulations so we have to separate out the clinic entity and the MSO.
We’ve been open for 1.5 years and we’ll finish this year around $1.7M top line. We’re still only around 30% capacity across the three clinics so we have a ton of room to grow in###-###-#### We’ve reached break even and will be profitable with around 10-12% net margins going forward.
Assuming we get all three clinics at full capacity (12 therapists per office, 45 clients per therapist), does anyone have an idea what kind of EBITDA multiple we could command, approx?
Any insights on sales multiples in outpatient mental health deals?
by a searcher from The College of New Jersey
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The franchise variable - depending on the franchise - could be an issue for an acquirer. But leaving that aside, if you're doing 12% on 5.66 of top-line, that'd be 680 of EBITDA. Are you just talk therapy (no higher margin lines of business like psychiatry, psych testing)? If so, and you were doing 680 EBITDA right now, maybe you could get around 5x EBITDA.
Too small for us now but NJ is interesting to us so may be worth a chat in the new year.