Valuations & Guidance at a Reasonable Price
Our valuations of healthcare services providers assess realizable “street” value in a real-world sale.
Our approach is neither an appraisal of the facility’s best and highest use, nor a normative derivation of its ideal economic value. Our valuations are empirical determinations of what price the business and assets could sell for in an open-market transaction, as affected by a reality-based matrix of variables, including:
- Its actual financial and operating history and performance,
- Its intrinsic condition and value of the assets,
- Prevailing health care and financial market conditions,
- Regulatory constraints and requirements, and
- Current industry valuation benchmarks and “rules of thumb”
Our proprietary Valuation Assessment does not conform to procedures for MAI appraisals conducted under the Uniform Standards of Professional Appraisal Practices, maintained by the Appraisal Institute, Chicago, Illinois. Technically, our valuation is a “market value” determination, as opposed to a “fair market value” determination. The difference is that the former is primarily a transactionally-driven estimate of realizable net selling price in an open and competitive sale process, or sometimes referred to also as “street value,” while the latter is an ideal and hypothetical estimate of value, and can include “highest and best use” determination. In reaching a proper valuation, this limited scope assessment relies heavily on the Business’s financial results, facility characteristics, market conditions and future upside potentials. In an actual sale, valuation is not a precise science, but often a starting point for negotiation of price between buyers and sellers.
Our reports are used for internal purposes to establish a selling price or to consider a healthcare facility’s or program’s strengths and weaknesses and potential strategic repositioning.